How (and what!) to trade post-election

Wow! The election is finally over. Whether you supported Hillary or Trump, now it’s time to get down to the business of making money. So what happens next?

The anticipation going into yesterday was that the Trump win would lead to a market crash. That didn’t happen. This is an important thing to remember – market crashes are a rare event. While they do occur, they are usually a once-in-a-decade thing. That doesn’t mean we shouldn’t be watching for them, but betting on them is usually a bad idea. At best, you lock your money up in positions that don’t make money when you could be in stuff that’s moving. As trend traders, we (you guessed it!) pay attention to trends. And for now anyway, the long-term market trend is up, and we need to respect that until we see signs of change.

Just because a crash isn’t imminent doesn’t mean there aren’t money-making opportunities! What I like to do when you have a major change like a new president impact the market is to look at sectors that could turn around. The government has a huge impact on the stock market and any anticipated change in policy can serve as a serious catalyst. I use TC2000 to view the sectors, as it’s easy: you can click on the sector you want to look at and flip through every stock. I then look at each one individually, looking at the volume, chart pattern, and float.

There are three sectors I’m watching carefully now. All three have been beaten down by government policy (or anticipated policy) and could see a rebound under a Trump presidency.

The first is biotechs, which have experienced increased regulation in the last few years. I’m particularly watching $LABU. It’s had a big run recently, so don’t chase it. Instead, wait and watch for it to come back down to a support level, then plot your entry if it still looks good.

Coal! This could come back from the dead over the coming years. I’m watching $CNX, $CLD, and $BTUU.

The last one to watch is for-profit prison corporations, which have taken a hit on news the government will not renew contracts. $GEO and $CXW look particularly good. Again, don’t chase up. We need to digest the recent gains they’ve made and look for low risk opportunities.

Fear and uncertainty can get you profits if you make wise decisions. The question is, do you know how to take advantage of those opportunities? My Bulls Mentorship program is designed to provide one-on-one guidance to help you achieve your trading goals. If you want to learn more, email me at Sessions start in a week!