Politics and the Stock Market

THE WEEK

It was another choppy week of market price/action with Friday ending on a big up with increased volume.  We are still seeing hard hits with economic announcements.  Here’s the reaction on Friday from the September unemployment report.  Note the huge volume at the announcement release.  

Knowing the Market has big reactions to announcements , smart traders are aware of the dates and times and trade accordingly.

LOOKING AHEAD

This week’s major announcements include the PPI and the release of FOMC minutes on Wednesday.  On Thursday the CPI and Crude Oil Inventories will be released.  I have started watching the oil inventories because I believe that gas prices along with other inflationary trends will play a major role in the elections.  I am not going to discuss politics other than to say it is going to be impactful for the Market.  No matter what your political stance is, placing trades to match the rhetoric and the mood will impact your trading profits

HOW AM I DOING?

Even though I didn’t make place many trades this week, my gains were good – just over 2%.  I still have one stock that was PUT to me that I am dealing with by selling covered CALLS while waiting for the price to recover.  It is a slow and painful process to massage the trade to at least a breakeven overall.

Elections are a year away but the political scene is heating up with a lot of the trash talk found on social media.  The posts are dominated by crazy headlines.  And of course, we all know what ever is on the internet is the absolute truth.  (I hope you all realize I am just being sarcastic.)  I do believe as smart traders we need to understand how politics effect the Market and our trades.  That is the subject of this week’s DEEP DIVE.

Thursday’s DEEP DIVE

A Study of Politics and Economics -

How it affects the Market