Political Headline Risk Holding The Market Hostage

Friday looked and felt great, until there was about 45 minutes left in the trading session, then when wheels were up on Air Force One, WaPo and the New York Times dropped simultaneous, rumored based articles that no one can verify independently. 

There is no doubt that the media is out to get Trump; whether you think it is justified or not is beyond the scope of this post, and my purpose here is to focus on the impact to the stock market. Knowing that anything that they can get their hands on that sheds a negative light on the stock market will on the front page of their site and on hard copy creates a volatile environment for traders in the stock market. 

DC and the media is working towards getting the President impeached and ultimately removed from office. Whether that actually happens or not ultimately won’t be known for a long time, but in the mean time, it creates an insane amount of volatility and unpredictable mood swings form the market as a whole. That is what we saw Friday afternoon. It was enough for me to dump some good positions in some good stocks. Mainly because the risk of holding positions over the weekend with the potential of an onslaught of news headlines being published was more than I was comfortable dealing with.

So yes, the market is showing some jitters, we all are. The sustainability of this market in the face of a failed agenda, an agenda that has been the source of the market’s Trump rally for the past 7 months, and the prospect of him having to be remove from office (regardless of whether it is justified or not) is not going to be good news for the stock market going forward and could create a sell-off similar to what we saw back in the Summer of 2011. 

So stay vigilant and don’t let this market sucker you in to making large bets, because it won’t take much to be wrong. Keep them small for now, and make sure that you are consistently raising the stop-losses. 

S&P 500 Chart

Current Stock Trading Portfolio Balance: 

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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