The Stock Market And How To Swing-Trade Market Seasonality | Podcast Episode #31

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Learn to trade, stocks successfully, learn to profit consistently. I’m Ryan Mallory and on my weekly podcast, I’m going to teach you the in and out of a complex ever-changing stock market. If you will learn to trade better trait, smarter and profit bigger.

0:26
Now let’s go trade. Hey everybody, this Is Ryan Mallory and today I want to talk to you about Market seasonality because we’re on the last day of quarter 3. We’re going into quarter for which tends to be for a lot of companies because of the Christmas season and the holidays the strongest quarter of the year.

0:46
So let’s talk about that and let’s just talk about to what we just came out of here which is typically the the dolor time of the markets, the summertime the time, when the markets really aren’t supposed to be doing anything. And we’ll talk about the whole sell in May and go. A way that everybody always likes to espouse.

1:03
So, yeah. First off selling may go away. Do you just really sell all your stocks and go away and act like the market isn’t there until about November time, period? And then you buy back into the market and hold again until May which at that point you sell again. No, you never do that. In fact, historic over the last few years, the summer months has been some of the best times for the market.

1:24
So, I actually appreciate the the summertime and do see it as a time where you can make some profits, both to the long side and short side, we’ve seen some Summers where it does fall apart but you look at the summer here and the large majority of the markets gains this year so far, has come in the summertime.

1:42
So looking at the S&P 500 chart, you can see that if you go and look at the monthly. That here and met the Mark was only up about 11 and a half percent about. I’m not giving you an exact number.

1:58
I’m basically recalling from memory here, but ever since then June, July August September, it’s four straight months of gains in July and August, we’re actually pretty sizable moves for the market as a whole so no you don’t sell them a and go away.

2:16
You still continue to trade the market, follow the risk. Follow the opportunities that the market has given you. But Certainly, you don’t go getting rid of your positions, just because a, so some old expression that somebody created, I don’t even know who created it, but whoever did it obviously didn’t have much success trading in the summertime.

2:35
Now, granted, there are some seasonality issues with trading in the summertime. The volume tends to be a little bit lower. We saw some of our lowest volume levels that some are, in fact, there were some days where the volume was less than on a half day of trading on Christmas Eve.

2:51
Pretty, pretty, pretty low. And it’s so it can make for some pretty boring trading sessions, and particularly in August, right before school starts back up. And before the Labor Day holiday, you have a lot of people that are taking those last vacations up in the Northeast.

3:07
And as a result, the volume does dramatically fall off some, but while the volume may be lower and the seat, and during that time of the year, the the trading opportunities still exist, you just have to be sometimes a little bit more patient with them. Em, you can’t expect always huge moves stocks like Johnson & Johnson, or Walmart or outside of earnings.

3:31
They’re not going to bake massive leap. So you just got to continue to ride that stop-loss higher, if that’s the direction that it’s trending and book profits accordingly. So now but with this coming up on quarter for. So the day of this video here and podcast is the last day of quarter 3 And then we’ll have earning season coming up in a week or two but you also have a midterm elections and so the midterm elections are going to be very contentious.

4:01
You got a lot of people still bitter about the 2016 election and vowed to get the vote out and everything else. The house is expected that I would not Bank on it to go to go blue or go to the side of the Democrats and November and the Senate probably not going to happen.

4:20
The map is just very much more in favor of the Republicans. They’re not going to flip the Senate, unless something just drastically happens or just an insane amount of voter turnout relative to Republican turnout Democrat relative to Republican turnout happens and I don’t see that happening.

4:39
There’s just too favorable of a map for not only two Republicans to hold the Senate but to actually increase their majority in the in the fall time here. So since it’s probably going to stay in Republican hands. The house, most people think that it’s going to flip.

4:55
I wouldn’t Bank on that either, especially after what we saw yesterday. With the Kavanaugh hearings regardless of what side you are on that, that still stirred up a lot of emotions in a remains to be seen, which side, it tend to stir up a lot more of. I mean, you can probably look at it from a Democrat side and see where possibly the turnout for November could actually be suppressed and people actually be more Or discouraged as a result of the Kavanaugh hearings who were actually hoping that the Christine Ford coming forward would would stifle that.

5:29
But any case This, the segment here that I’m doing, it’s not about the politics that are what side you are on, or who’s, right? And who’s wrong, what I’m trying to get to is that this will have an impact on the stock market, and the impact really remains to be seen that.

5:49
The market doesn’t really like change all that much, so I would see a Democrat takeover of the house as possibly creating a little bit of strife for the markets. I think, the best scenario for the stock market would be For the Republicans to retain the house, retain the Senate.

6:05
And for there to be no switching hands. And I mean, the market has like Trump as president, so far, there’s no denying that the market is insane run last year, it’s had a pretty decent follow through this year. Although January, was amazing.

6:22
Figaro is absolutely awful for investors. So I can, I can also see where the Democrats, taking control of the house. Would create a little bit of Market strife and a possible sell-off going into the Christmas Seasons after that, you have the Christmas rally.

6:42
So, what do we expect from the Christmas rally? Well, the Christmas rally is actually considered to be the last three trading days of the year and the first two days of the following year. That’s by definition with the Christmas really is, but a lot of people expect the Christmas rally to kind of go from the end of Thanksgiving, through the end of the Year and that’s that.

7:04
Oftentimes a very bullish time. Thanksgiving, week tends to be a more bullish week in the market that I actually I had at one time where the market just fell to pieces on the day of Thanksgiving because the Futures are still trading. So that was, that was a fun Thanksgiving to be long on, not really.

7:22
So you have the Christmas rally coming up. That’s going to as long as the retail. Number State, good. Black Friday number. Stay good. The market. Should should rally off of that. As long as it’s beating expectations, obviously earnings coming up here in September and October.

7:39
Particularly the last I’m sorry in october-november particularly the last week in October, and that first week in November tends to be where you just get a ton of them reporting. That’s just where probably 60 or 70% of your stocks, are reporting their numbers right there.

7:56
That week, you survived that week, you had the midterms right at that same time. Time you get through that and unscathed yeah there’s probably a good chance you really into the your end there. But also remember to December and I don’t know what it is about December, December.

8:13
Always seems like it’s a weird month for me to trade. There’s a lot of stocks because of tax issues and everything else where people are selling stocks that might not have been doing well for them over the year. So a lot of your Runners keep on running but a lot of your laggards you know, will lag even more.

8:29
So that’s also a thing that you want to keep in mind. But what ultimately matters in all this? What what should we be most concerned about? We’ve talked about the whole selling may go away effect. We’ve talked about the elections coming up, we talked about the effect that the cabin, all hearing might have on the elections.

8:47
Talk about the Christmas rally. We talked about retail numbers that impact the Christmas. I we talked about quarter three earnings, okay, the Black Friday retail numbers that are going to be coming out following the Thanksgiving holiday.

9:03
But in all this price matters the most and you can’t just blindly go into season two. These new seasonality issues and factors and just blindly say I’m going long because November through May tends to historically be a great time period for the market or because you think the Republicans are going to win or shorting the market because you think that the Democrats might take over the house.

9:29
Now you can’t you can’t do that. Ultimately rice is what matters most and if you don’t follow price you are going to really be setting yourself up for a disaster. Really setting yourself up for some some major problems so so don’t do that as as far as my first three months of trading here on the new year.

9:48
It’s been a great year. We’ve in the Trading Block, we’ve had about a 57 percent accuracy rate anytime that you can keep a 57%, when ratio going. That’s, that’s really solid. I’m something I’m very Excited about and happy about and look forward to what quarter for has and just continue to push the prophets higher and consistently profit each and every month.

10:10
So with that, I’m going to wrap it up here and hope you guys learned a little bit about the market seasonality issues that are going to be facing us and quarter for and where we can expect to go and the days and weeks and months ahead. Thank you. And God bless. Thanks for listening to this week’s podcast of Swing trading with Ryan Mallory.

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I’d like to encourage you to join me in the SharePlanner Trading Block where I navigate the financial markets every day with Traders from around the world. With your membership you’ll get a 7 day trial access to my trading room and text and email alerts. So go ahead and sign up by going to shareplanner.com, backslash Trading Block.

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That’s www.shareplanner.com/trading-block backslash Trading Block, and follow me at SharePlanner on Twitter and on SharePlanner’s, Facebook page, where I provide unique market, and trading ideas every day. If you have any questions, please feel free to email me ryan@shareplanner.com all the best to you and God bless.