Stock Market Crash, Recession In Hands Of Phillies?
Is this the beginning of the end for hope in a stock market uptrend?
The World Series tussle between the Philadelphia Phillies and Houston Astros kicks off tonight.
A Phillies series victory may be the harbinger of a worldwide recession.
Or it could be a superstition that leads retail traders into a squeeze play before the market takes off like a Musk-fueled rocket ship?
Will Phillies win cause recession, stock market crash?
Should retail traders follow economic history coinciding with professional sports events or plain old logic?
Anyone with a connection to a sports bettor doesn’t like the emotional answer to that question. Traders with a mindset of making a profit will lean into logic.
The topic arises from the historic connection to economic crises and the Phillies winning in the big leagues.
Here is a little history:
- 1929 – Athletics (located in Philadelphia) win, stock market crash
- 1930 – Athletics on top again, Great Depression hits hard
- 1980 – Phillies win, recession follows
- 2008 – Phillies win, financial/housing crisis hits
- 2022 – underdog Phillies advance to World Series matchup
- 2023 – Unknown, but prognosticators already calling for recession
The stock market trend to date appears to be fueling the argument for a repeat of the “Phillies win followed by recession” historical scenario.
Outside of bear market rallies (like today) the stock market has been trending lower all year.
This is highlighted by the once darling pandemic-fueled technology stocks. Leaders in this sector – Amazon.com, Inc. (AMZN), Apple, Inc. (AAPL), Meta Platforms, Inc. (META – formerly Facebook), and Alphabet (GOOGL) – have all faltered as the World Series gets underway.
Amazon has fallen from a January level of $165.36 to $103.41 today; Apple from $175.53 to $155.74 (up 7.56% today); Meta from $336.53 to $99.20 (up 1.29% today); and Alphabet from $144.40 to $96.29 (up 4.41% today). Across the technology sector, companies have lost a combined $3 trillion in valuation over the last 12 months.
All of these tech sector leaders have shed employees this year or have plans to downsize.
Even the “wondrous” world of cryptocurrency has taken a beating this year. Bitcoin has dropped in price in the neighborhood of 70%, and there are reports of the company slashing this summer as much as 40% of its workforce.
As the economy and stock market unfolds, maybe the Elon Musk factor will override the “Phillies Special.”
Musk’s antics in buying Twitter culminated in a delisting of the stock. It last closed at $53.70 on Thursday, up .66%. Musk paid a reported $4 billion for the social media company, or $54.20 per share.
While the “Phillies Special” sways the history argument for an impending recession, Simpler’s traders continue to follow “what the market gives.” Today it delivered a burst of positive upside movement, even in the lagging technology sector.
In the market today, the Dow soared higher by 828.52 points to close at 32,861.80 for a 2.59% spike. The Nasdaq followed suit by surging to 11,102.45 points for a 2.87% run higher while the S&P 500 was not far behind at 2.46%, pushing higher to 3,901.08 points with 3,900 being a key psychological level for traders.
Stock market grinds along despite wins, losses
No matter who finishes first in baseball or whether Musk hits a home run with Twitter, the stock market is going to grind along.
Traders have been forced to change strategies to track sudden bursts in market energy amidst the bear market environment and work to identify trades. There is no dependence on luck in these strategies and no billionaires coming to the rescue.
Simpler’s traders are constantly watching signals for market participation (volume in trades) that expose movement.
“Where trades work is where the sentiment turns into momentum and that momentum eventually turns into a trend,” said Raghee Horner, Managing Director of Futures Trading at Simpler Trading. “In that process you have participation. You have a lot of market participants thinking the same thing.”
“Regardless of the kind of trading you’re going to do, market structure is going to affect you,” Raghee said. “You’re either going to know that’s a fact, or you don’t. It’s going to affect you.”
Successful traders adapt to the shifts and twists in the stock market. Since mid-June, Raghee has leaned into day trading with a high degree of success.
She prioritizes using specialized indicators – free and purchased – to track ever-changing market signals. Key to her indicator strategy is understanding market volume-based support by monitoring the 8-, 13-, 21-, and 34-day exponential moving average (EMA) on stock charts.
These EMA signals are fundamental to her identifying market movement whether the shift is bullish, bearish, or neutral.
“I trust my gauges,” Raghee said. “I’m not just looking for a trade, I’m looking for a good trade.”
Traders play the game for wins, not averages
Trust in the strategy and tools builds confidence and keeps her from chasing news, baseball superstition, or billionaire antics.
“I’m not going to take all the trades,” Raghee said. “But I’m here to tell you there are plenty of opportunities when you use volume and volatility and price in conjunction.”
“That’s the way we play the game,” Raghee said.
For more on Raghee’s trading game plan, catch a glimpse of her free webinar.