Swing Trading Trump | Podcast Episode #459

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Hey, I’m Ryan Mallory and this is my Swing Trading the Stock Market podcast. I’m here to teach you how to trade in a complex, ever changing world of finance.

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Learn what it means to trade profitably and consistently, managing risk, avoiding the pitfalls of trading, and most importantly, to let those winners run wild.

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You can succeed at the stock market and I’m ready to show you how Hey everybody, this is Ryan Mallory with shareplanner.com’s swing trade in the stock market.

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In today’s episode post election, we’re going to be talking a little bit about how the election of Donald Trump to a second term effects our swing trade.

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What can we expect based off of what we learned from 2016 to 2020? I traded all throughout 2016 through 2020.

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It definitely had its ups and it’s downs. And what was the lessons learned during that time?

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So today’s e-mail comes from a guy, I’m just going to call him Ethel because I don’t use people’s real names on here and I like to give him Florida red nickname.

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So Ethel is the name Ethel rights. Hey Ryan, been following your swing Trade in the Stock Market podcast.

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Right now I am trying to wrap my head around what Trump means for my trading strategy going forward. I’ve been at this for about four years now and I’m trying hard not to get caught up in all the

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drama. Everyone’s got an opinion about what stocks I should be buying right now because of Trump being re

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elected as president. My trading buddies are all over the place.

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Some are going all in on oil stocks, others are loading up on defense plays, and a few are just sitting in cash.

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Me, I am just sticking to my charts, but it’s tough when everyone’s screaming about their sure thing plays like Tesla.

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How are you processing through your approach to swing trading for the upcoming year? Are you seeing any particular opportunities emerging that you think might have legs to them?

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Not looking for any hot tips. I’m just trying to understand how an experienced trader like yourself approaches these post election

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markets. Thanks for keeping us grounded through all of this, Ethel.

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OK, so there is actually a lot to talk about on this one and I’m glad that somebody wrote me about this.

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But I’ll start off by saying what a rally, a post market rally that we have seen so far this week. And I talked about this in a YouTube video that I just did this past week about how there’s often

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times a very strong move in One Direction or the other following the election. And so this time, like the previous two times, we’re getting it to the upside and that 120 point gap

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higher following the Election Day results. That was massive.

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And so if you’re on the sidelines, I’m on the sidelines and I don’t mind saying that I’m on the sidelines.

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I went purposefully into the election knowing that there was a lot of headline risk there. It was a earnings level event for the overall stock market.

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It was essentially like every stock out there was going to experience our earnings level event from the election results.

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And that’s what you ended up getting. You ended up getting a lot of stocks you take like Tesla moving 15% had Harris 1. You could imagine what Tesla would have done thereafter would probably been down 10 to 15%. And so it was a heavy, heavy headline risk event that I chose to go into cash for.

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But post election, it’s very difficult to get back into this market. Everything is run so hard that it’s extremely overextended.

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And then about 3 days, the markets run about like 300 points almost. But the key is, is not to chase after it.

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You just don’t chase after these kinds of moves. There will be opportunities to get back in, but what you don’t want to do is get in, get in at the top, and then all of a sudden the market starts pulling back.

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But if you’re just getting into new long positions, it’s going to feel a lot worse than if you had gotten in a couple days prior.

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So one of the biggest things that I remember trading during the Trump administration the first time around were the Trump tweets.

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And now he’s on Truth Social. So I do have a true social account.

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I don’t think I’ve ever used it before, but I’ll probably have to start at least watching what’s going on there.

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That SharePlanner, just like my Twitter account is last thing I really need to do is add another social media platform to my life.

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But the, the whole thing with his tweets or his posts on Truth Social, what you’ll find is, is that there’s a lot of headline risk behind them.

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And, and I remember from 2016 to 2020, we, we haven’t seen that at all with Biden when he was president, he didn’t really tweet out much that would stir up the markets.

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Usually was like a staff writer at intern that was just being paid to mimic what whatever the president was saying publicly at the time.

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So there wasn’t nothing that was really substantial coming from Biden’s tweets out beyond what he was already saying publicly or through press conferences or through his press secretary when Trump

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tweets or when he posts. I don’t know if he’s going to stay on Twitter during his administration or if he’s going to use it

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as an opportunity to do everything through Trump’s social media platform, through social. But either way, it’s going to be headline risk.

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There’s going to be a lot of it. One of the ones that stands out to me the most is we were right in the middle of the Chinese tariffs

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and it was causing all sorts of problems for the markets. You would have Trump tweeting out that, you know, we’re going to impose X amount in tariffs on

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Chinese steel or whatever they were importing at the time. And so it would cause the stock market to go down.

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You’d be frustrated because I crud, you know, that tweet just wrecked my day. Now I was up 2% and now I’m down 2%.

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And then over the weekend you would get like, OK, there’s improving relations and then the market right back and, and everything.

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And it would just be like this complete circle that you were just going around. And all the time you, things will start to improve and then things will start to diminish and things

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will start to improve and then diminish again or worsen. That’s what it was like with with like the Chinese terrace.

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But then you add another variable to it. And I remember, OK, everybody’s focused on the Chinese terrace.

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And then one night, Sunday night, I, I checked the futures and they were like plummeting. And there was no reason for him to be plummeting.

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There was improved Chinese relations on the on the whole tariff issue thing. And it happened to be that Trump tweeted out, let’s start a trade war.

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He didn’t say it exactly this way, but he essentially said let’s start a trade war with Mexico. And so the stock market was selling off on that came out of complete left field.

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I don’t even know if he really followed up much on it thereafter. There was nothing that really came about it thereafter.

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But at that time, that tweet just wrecked the stock market. So there is an expansion of headline risk under a Trump presidency.

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And again, I’m not saying this from a political standpoint. I’m not trying to make anything in this podcast political.

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I’m just telling you exactly what the experience was like for me here. There was times where the trading wasn’t easy because you didn’t know what he was going to tweet

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out. And so that was one of the the areas of swing trading that was difficult because you couldn’t plan

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for it because you didn’t know when he was going to tweet and you didn’t know what he was going to tweet about.

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Another area that I think will be pretty interesting is this whole Jerome Powell versus Donald Trump.

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Now, Jerome Powell was actually appointed by Trump. Jerome Powell is a Republican.

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He was reappointed by Powell. I want to say it was like 2022.

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I’m not quite sure on that, but his, his, I guess it’s a four year term, isn’t it? And then his term is up in 2026, May of 2026.

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So at the presser the other day, Jerome Powell was asked following the FOMC statement being released, if Trump asks him to resign Woody.

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And it was probably the first time I’ve seen Jerome Powell not talk out of both sides of his mouth. I can’t stand Jerome Powell.

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I, I hope he does resign, but he was just like, no, you could tell that he would had been prepped for that question to come.

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Like, hey, you’re going to be likely asked about, you know, what are you going to do if Trump asks you to resign?

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You knew it was coming. And so he probably had this is, this is Powell I’m talking about here.

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He probably had an advisor that says you need to look really stern at the questioner and say, no, you got to send a strong message.

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You got to act tough. And so Powell, you know, the the guy that probably was picked on on the playground a lot growing up,

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he put on his tough guy mask and said no. Now is it possible that he could force him out?

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Yeah, it is possible because it’s really never been tried before. There’s nothing to say that he can’t and there’s really nothing out there to say that he can.

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It’s it’s really drone Powell’s interpretation that says that he that he can’t. But I think you put enough public pressure and and so forth.

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And it’s not hard to hate the Fed. I’ve, I’ve made that one abundantly clear.

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I mean, they, they screw up enough to where you can, you can fire somebody for cause. Heck, you could fire him just for calling inflation transitory for for like a couple years there.

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And how, how wrong was he about that one? But that also could play out.

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And then another way that it could play out. I do think the Fed is political.

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I, I do think Jerome Powell tries to play in favor of the president’s. I think he is playing to President Biden right now.

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And I think that the rate cuts couldn’t be coming at a more worst time. I mean, if you look at the last FOMC statement they did, they took out the language in there about

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inflation coming back down to 2%. They completely took it out.

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So if you’re taking that out and you don’t have faith that it’s coming back to 2% and that’s your inflation target price, why are you cutting rates?

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You got the stock market at all time highs, employment isn’t spiking, but yet you’re cutting interest rates at all time highs.

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I think he likes the idea of a stock market that’s running at all time highs. I think that’s to him feels like a Crown achievement.

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Even though he says that he doesn’t follow the stock market or make decisions based off of the stock market, he absolutely makes decisions based off of the stock market.

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So how that plays outgoing forward will be very interesting. Does he fight Trump on interest rate cuts?

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This all of a sudden he become more hawkish because he knows that he is essentially a lame duck. Speaking of Jerome Powell from Powell has already been it’s already been said that he’s not going to

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reappoint him. He’s going to let him finish out his term.

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But if that’s the case, does Powell actually get a backbone and say, hey, I’m going to raise interest rates because that’s what’s right for the economy right now, not interest rate cuts.

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So there’s that potential. There’s also the risk in foreign stocks.

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You’ve heard him talk a lot about tariffs. You know, tariffs is supposed to be a big part of his administration.

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He wants to put tariffs on a lot of countries and and on a lot of products. Depending on how big those tariffs are, yes, maybe holding stocks that have heavy foreign country

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interests or based in foreign countries may not be the best idea. There could be a lot of risk in these foreign stocks, headline risk big time.

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So for me personally, I’d, I would be staying away from the headline risk from all the Chinese stocks.

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I don’t want to wake up and see if my, my trade down 25% because something happened and JD is down well below my stop loss or Alibaba or Baidu’s taking a, a beat down.

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I just don’t need that kind of headline risk. So I do think that those stocks, they’re going to be off limits for me over the next four years.

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You’ve also heard about Elon Musk coming into the administration. He says he wants to trim $2 trillion off of the off of the budget.

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I think it would be great if they did because I think we’re on an unsustainable path in our spending.

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But what does that mean though, If he does it like what he did with Twitter, where he axed 80% of the jobs and kept it still running efficient, you’re looking at massive job losses in the federal

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government, in the federal bureaucracy. And as a result, you’re looking at cuts in spending as well.

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You take $2 trillion out of spending that’s going to trickle down into the economy and there’s not going to be as much spending going on and, and helping companies like Amazon and, and Walmart and

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Apple. There’s going to be less money floating around.

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Again, probably a good thing long term to have less bureaucracy and jobs being cut that aren’t even necessary anymore.

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But you take cuts in spending that’s going to have an effect on the market and increase and jobless claims going to have an impact on the stock market as well.

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I would also say to remember this that Trump is not looking for re election this time. He’s not going to be like in 20/26/2020 seven starting to campaign some because he needs to be re elected.

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No, he’s done. I mean, he’s 78 going into the presidency. He’ll be 82 when he leaves.

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To give you perspective. Have you seen what Bill Clinton looks like these days?

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The dude looks old as dirt. I mean, he looks like he’s a zombie walking anywhere he goes.

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Donald Trump is actually older than him by a few months. Like I think it’s like 2 months to be exact.

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But Donald Trump is older than him, so he’s going to be very old when he leaves. But my gut instincts are telling me that he’s probably going to be much more willing to take the

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hits in the short term by cutting spending, by reducing government largess. And he may attempt to do something while, I mean, there’s talks about getting rid of income taxes,

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which I would love that. Holy cow, that would be great.

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But yes, on the flip side, there’s going to have to be money received, some from somewhere else. You’re going to have to get it through a national sales tax or through the tariffs.

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He’s talked about it, a lot of it coming from tariffs. I think at some point, though, you do enough tariffs, you’re going to bring all that manufacturing

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back into the United States. Again, not a bad thing, but it’s going to lessen the amount of money you can collect from tariffs.

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So that means you’re going to be more dependent on the national sales tax instead. One of the things that a national sales tax does is that it even if you’re doing something illegal

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or you’re doing something wrong, at some point you’re going to want to spend that money. And when you spend that money, the government’s going to finally get a cut.

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You take like illegal drugs, people reporting illegal drug sales on their income taxes. Absolutely not, But well, that’ll still go on under a Trump administration.

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When those people go to spend the money, whether it’s a, you know, a new boat for nefarious purposes or buying a new car, guess what that’s going to get taxed though.

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So you’re actually able to expand where you’re bringing in tax revenue from. You’ll actually be able to tax drug dealers and prostitutes and IT and all those people that weren’t

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reporting the income on income taxes for those particular types of jobs. You’ll be able to tax their spending though.

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So there may be things that in the long term work out really well, but I do think there’s going to be a lot of short term pain if some of these things go through, especially if you do get rid of the

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income tax system. You’re going to have a lot of short term pain as a result of that.

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But one thing you’re not going to have short term pain from is swingtradingthestockmarket.com. Go to swingtradeinthe-stockmarket.com.

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You’re going to get all of my stock market research each and every day. That’s going to include my daily watch list stocks that I’m looking to make trades on, my master

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list of bullish and bare stocks that I put together each and week. That’s where I’m going to curate a lot of my trade setups from.

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Plus I’m going to do watch list reviews in a video format of my watch list from each day. So you’re going to be able to get a overview of what worked, what didn’t work, and my approach going

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forward on my watch list, as well as mega cap updates on all the big time stocks and stock market updates throughout the week.

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So really good stuff. A lot of videos, a lot of research, a lot of content for you to consume.

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Check it out swingtradingthestockmarket.com and in the process you’re supporting this podcast. And so another area that I would be concerned about is the defense stocks.

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I don’t think the necessarily the defense stocks are going to be a good place for parking your money during the Trump administration.

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And the reason why I say that is because I don’t necessarily think he’s going to cut the spending in the defense.

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Yes, I do think that there could be some efficiency measures implemented into the Defense Department so that the companies running more efficient, just like you hope that we can do that with the rest

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of the federal government. There’s a lot of wasteful spending in the Defense Department.

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So yeah, they may they may get hit right there. But I also don’t see defense getting a lot of new dollars.

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And the reason for that, I just don’t see Trump wanting to get us into a lot of conflicts. I don’t think that you’re going to see a lot of the federal spending supporting like Ukraine going

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forward. I think that’s going to get cut off pretty quickly because when when you give support to Ukraine,

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some of that money is still coming back to the defense companies through contracts and all. I do think that there’s going to be less handouts.

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And any time you go to war or you’re involved in an international conflict, there’s going to be more money being sent to these defense contractors.

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You look at all the weapons, all the ammo, all the the airplanes, tanks that we’ve sent to Ukraine, to Israel.

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Well, we have to replenish that. And how do you get that replenished?

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By sending more money to the defense company. So the defense companies love it when we’re involved in international conflicts because that’s more

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money coming right back to them. If we’re not doing that, there’s not as many new orders for tanks and airplanes and Humvees and all

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that stuff. So I don’t think it’s going to be a great time for the defense companies.

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You may have heard that there’s some talk about the Chips Act getting axed. If that gets axed, how does that affect the semiconductor stocks?

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I don’t know if it’ll hit NVIDIA too much, but it could hit some of your smaller semiconductor companies.

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And finally, we talked about the Trump tweets before. One of the things to keep in mind about that as well as not just so much like random, like, hey,

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let’s have a trade war with Mexico, but you also see where he’s called out companies before. And, and I know that because I’ve held those companies, I’m like, ah, crap, he just dropped 5% on me

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because he called out Google or maybe it’s Amazon and he’ll do that. There’s going to be a lot more access to him to what you saw with Biden.

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And so there’s going to be more opportunity for him to talk. He talks off the cuff.

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And so he may say, ah, you know, we need to levy some heavy taxes against Amazon and then Amazon goes down 5% like, ah, crap.

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But then he may also say, Oh, you know what state of Florida got really hit hard with some hurricanes.

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We need to send $1000 gift cards to Home Depot to every resident in the state. I’m just making up stuff here, guys.

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Don’t take me serious on this. But let’s say he did say that, right?

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What’s Home Depot going to do? Home Depot is going to go through the roof, so you can benefit from it on both sides of the trade.

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You just don’t know when or what or who he’s going to say something about. So you’ve got to be ready for that at all times that hey, he may say something about a company that

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I’m trading in and as a result, it could be good or it could be bad, but I just need to know that there is a headline risk event surrounding almost every trade that I make.

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OK guys, I hope you enjoyed this podcast episode. If you did, make sure to leave a five star review on whatever platform that you’re listening to me

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on. Also, make sure to send me your questions, your stories, what you need help with to

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ryan@shareplanner.com. I get all the emails, I read them all.

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I make episodes out of nearly every one of them because a lot of you guys just don’t do it. If you’re on the fence about it, do it.

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I guarantee you it’s not going to be a stupid question. I’d love to have it on my show.

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And make sure to check out swingtradingthestockmarket.com. Thank you and God bless.

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Thanks for listening to my podcast, Swing Trading the Stock Market. I’d like to encourage you to join me in the SharePlanner Trading Block where I navigate the stock

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If you have any questions, please feel free to e-mail me at ryan@shareplanner.com. All the best to you and I look forward to trading with you soon.