Market rotation — it’s a thing, and it happens all the time. The sector that was hot yesterday could be cold as ice tomorrow. The same setup that worked 99 times in a row for you is suddenly falling flat. 

Just when you think you’ve tamed the market with your mad trading skills … it comes back and bites you.

It’s just the way things work in the stock market. Seasoned traders understand this and don’t take it personally. But for newbies, market rotation can seem like the end of the world.

Don’t panic — instead, learn to adapt. In today’s episode, SteadyTrade podcast co-hosts Tim Bohen, Kim Ann Curtin, and Stephen Johnson will show you how to stay sane and steady in the face of an ever-shifting market.

Market Rotation: What’s Happening Now?

In the past few months, the stock market has been crazy. 

First, there was a market crash during the early days of the pandemic. Then stocks started spiking like crazy. Suddenly, it seemed like everyone was opening a Robinhood account. 

An influx of new traders created the wildest 100 days in stock market history.

But are things starting to shift again?

Tim, Kim, and Stephen discuss the recent changes in the stock market surrounding and following the recent election

Could this be what Tim calls the “regain of a multi-generational bull market?” Should all short sellers be put out to pasture? 

Recalling the ‘Dark Days’ 

When the world had fewer smartphones and social media channels, the stock market was a very different place. 

In the episode, Tim talks about the ‘dark days’ of the stock market — a time when it was actually very good to be on the short side of things. 

As he puts it, the pattern was predictable: a big gainer would go sideways, then fail. It was practically like clockwork.

Until it wasn’t. Things are very different now … so what changed? 

Tim and Stephen discuss cycles of going long versus going short — it all depends on the market conditions, and what types of stocks you’re trading.  

About Those New Traders…

Have you been trading for a few years? If so, you’ve probably noticed an unusual surge in new traders in 2020. Why?

Well, to name a few reasons…

  • Boredom
  • Remote work/school
  • Employment changes
  • Changes in professional sports

Oh yeah, and stimulus checks.

Tim notes that if he was in his 20s and he suddenly got a $1,200 check, he’d probably use it to start trading. 

Trading mentors and teachers are having a moment — it seems like there are YouTube and social media ads everywhere for some options trading program, or a hot new crypto hack…

But are these good developments? 

The Problem Is…

The problem with all of the new traders is that they don’t necessarily know what they’re doing. Too few understand market rotation or the patterns in the market.

But as Tim and Stephen offer, this could create opportunities for traders who do take the time to learn the mechanics of the market and key trading patterns.  

So if you want to be one of the smart traders who can benefit from a shifting market, what can you do?

Learn to Adapt

When the market’s changing fast, what’s a trader to do?

Tim says, “Hashtag #UnpopularAnswerIncoming … the best way is to be here every single day.” 

Take notes. Take screenshots. Study the market. Watch stocks every day.

No, you don’t need to trade every day — but you do need to put the work in every single day.

Tim, Kim, and Stephen discuss techniques for improving your ability to adapt. 

You’ll learn a variety of different tools and techniques for beefing up your trading constitution — from waking up early to making a gratitude list to embracing technology.

But ultimately, Stephen says, it boils down to the fire in your belly. “If you don’t have the passion and you don’t love the game then ultimately the fire will die.” 

Are You Feeling the Market Rotation?

Do you have questions about market rotation? How have you adapted to a changing market? Go ahead … ask us anything! 

Remember: if we select your question or comment as an on-air topic, you could win a SteadyTrade mystery gift box. Leave a comment below or on YouTube!

Thanks for tuning in to the SteadyTrade podcast. Stay tuned for weekly episodes featuring the hottest topics for aspiring traders.

Did this episode speak to you? Please leave a review on iTunes.

Meet Our Hosts

Get to know Tim Bohen, Stephen Johnson, and Kim Ann Curtin here.

Follow our hosts on social media…

Tim Bohen

Twitter: @tbohen

Instagram: @tbohen

Stephen Johnson

Twitter: @Jonk87

Instagram: @stephenjonk87

Kim Ann Curtin

Twitter: @kimanncurtin

Instagram: @kimanncurtin