The stock market is one of the few places where bad news can be perceived as good.
For example, tech companies are laying off workers in the thousands… and stocks are ripping higher off the headlines…
Microsoft Corporation (NASDAQ: MSFT) released 10,000 workers … Amazon.com, Inc. (NASDAQ: AMZN) recently cut 18,000 jobs adding to the ones they cut in November…
Alphabet Inc. (NASDAQ: GOOGL) laid off 12,000 workers…
And it’s not just tech stocks anymore … Yesterday, Rivian Automotive, Inc. (NASDAQ: RIVN) announced it’s cutting 6% of jobs due to an impending EV price war.
Even FedEx Corporation (NYSE: FDX), said it’s laying off 10% of its management team.
To the average person, these headlines don’t sound good.
But not for Wall Street, which I’ll explain why shortly.
In fact, the recent market action has me believing that the market could rage … dare I say … like it did in 2020…
3 Reasons Why ‘Bad News’ Could Be Good News
There are thousands, if not hundreds of thousands, of workers laid off from the tech industry.
That’s not counting workers laid off from other industries.
How can this possibly be good news for the market? Here are three reasons that explain my thesis…
- The sheer number of people that are now sitting at home without a job is kinda similar to what set 2020 up to be so crazy. Lockdowns meant a lot of people were home with no job. Now we have close to hundreds of thousands of people at home again with no jobs. If they decide to try day trading, it could cause the same volatility and moves we saw in 2020.
- The people who were laid off aren’t poor. They had high-paying jobs and could have hundreds of thousands in savings. Plus, they likely got a severance package as part of their layoff. AMZN, GOOGL, and MSFT all offered packages that in some cases are costing big companies billions in impairment costs. With money in savings and their tech smarts — day trading might be an obvious choice…
- These are tech-savvy and smart people. But that doesn’t mean they can go out and get another job right away — at least not in the tech industry with the pay they’re used to. If you’re laid off from GOOGL, where are you going to go? All the companies are cutting staff, not hiring. So while there are still plenty of jobs available, they likely aren’t in high-paying tech roles. So would these workers rather take a job at McDonald’s? Or try day trading?
The laid-off workers might not know how to day trade, but they know technology — they can easily figure out a trading platform and how to execute trades.
They probably are also familiar with the stock market and have some kind of investments.
And with some of the stocks that saw wild moves in 2020 trading around 52-week lows — that could spark some interest.
That doesn’t mean they know how to trade or know our patterns. But that means you have the potential for hundreds of thousands of people — with a bunch of money and no knowledge — potentially coming into the market.
I hope they join the SteadyTrade Team and learn how to day trade penny stocks with rules and a process … I don’t like to see anyone fail…
But if they come in and blindly start buying penny stocks and chasing spikers — that means good opportunities for prepared traders.
Get excited. And get ready to make the most of it!
Join StocksToTrade Advisory to get my market update videos three days a week. Plus, it includes my ebook with my 10 top patterns and monthly reports. When you join, I’ll also show you the potential I see in Tesla, Inc. (NASDAQ: TSLA).
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S. If you’re a part-time struggling to balance trading with other commitments — I’ve got something for you! Click here to access my ebook, “The Ultimate Guide to Part-Time Trading” absolutely FREE!