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kingdips
Sep 29, 2023 7:45 PM

⚡️ Gov SHUTDOWN?! Market will tank?! What to do in this case? ⚠️ 

AMEX:SPY1D
SPDR S&P 500 ETF TRUSTArca

Description

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⚡️Some shutdown insights with chart:

Chart shows longest shutdown: 12/22/18 - 1/25/19

The fear factor has always been PRE-shutdown. Not DURING or POST-shutdown.

⚡️That means what?
  • If we shutdown, we may dip say 2-3%.
  • But what happens during shutdown?
  • You'd be surprised market actually RECOVERS during shutdown. BY A LOT.
  • During the shutdown in 2018-2019, the market recovered the ENTIRE DIP, whole +15%.
  • That's the same thing that happened in 2013. The market rose 3% during shutdown.


⚡️So is shutdown really bad for markets?
  • No. Only shutdown fears really cause a dramatic effect BEFORE it happens.
  • Remember the psychology of "priced in". Once a shutdown happens and market reacts for a day or 2, it's priced in.


⚡️But why?
  • After the shutdown happens, anything is good news.
  • If they announce a deal, that's good news.
  • If they vote, that's good news.
  • Thus, market does well during shutdowns.


Good luck. 🙂

AMEX:SPY NASDAQ:QQQ NASDAQ:TSLA NASDAQ:AAPL AMEX:DIA

Comment

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House passes bill. Senate now.
This will allow 45 more days.
Meaning more volatility/ uncertainty for 45 more days.
Bullish short-term on "good news".
Fundamental AnalysisChart PatternsTrend Analysisshutdowngovshutdownmarketreversaldipbuythedipbottom
Comments
elenaec
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i'm not on the news , are they talking about a gov. shutdown !!!
kingdips
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@elenaec, yes. A funding bill needs to pass to avoid a shutdown.
MyCryptoParadise_Nathan
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Great job on providing valuable insights into the markets. Your expertise is making a positive impact in the trading community. 🌟📊
kingdips
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@MyCryptoParadise_Nathan, thank you for your support. Appreciate that.
nzahir
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Remember why we started to go up in late 2018....Fed was pivoting from raising to cutting rates
kingdips
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@nzahir and China tensions were easing as well. Historically, price action during shutdowns shows recovery. We only have history to go off of. Going against historical trends would be risky. Either way, not risking much here or swinging a lot.
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