Welcome to the Golden Age of Trading Opportunity!
Since Trump’s election, we’ve seen our list of setups continue to increase.
Hot sectors, great patterns around every corner…
On Friday, I went over my current favorite sectors with my StocksToTrade Advisory members.
Subscribe to StocksToTrade Advisory to learn more.
What more could we ask for?
Well, another group of Trump beneficiaries just entered the scene!
Tariffs…Love them or hate them, they can’t be ignored.
For traders, tariffs present a unique opportunity to ride volatility and capture some serious profits. But timing and strategy are everything.
Today, I’ll explain how tariffs shake up the market and some trade ideas you can consider when they’re in play.
Table of Contents
What Tariffs Mean for the Market
A tariff is essentially a tax placed on imported goods, making those goods more expensive for consumers or businesses in the importing country.
The goal?
Either to protect domestic industries from foreign competition or gain leverage in trade negotiations.
But the impact goes beyond simple taxes. Tariffs often lead to:
- Market uncertainty and volatility
- Retaliation from other countries
- Shifts in supply chains
Remember, as traders, where there’s volatility, there’s opportunity.
Sectors and Stocks to Watch During Tariffs
Not all sectors react the same to tariffs, so we need to identify which ones tend to be winners or tend to react negatively.
Domestic Manufacturers (Steel, Aluminum, and Industrial Plays):
When tariffs target imported goods like steel and aluminum, domestic producers are the obvious beneficiaries.
If we look back on Trump’s 2018 tariffs on steel and aluminum imports, we see that stocks like Nucor Corp. (NYSE: NUE) and United States Steel Corp. (NYSE: X) saw big gains.
Potential Trades:
- Long positions in domestic steelmakers, aluminum producers, and industrial manufacturers.
Here’s what Cleveland Cliffs Inc. (NYSE: CLF) and U.S. Steel Corp (NYSE: X), both in the steel industry, look like right now.
Cleveland-Cliffs Inc. (NYSE: CLF)
CLF One-Month, One-Hour Candles Chart; SteadyTrade
U.S. Steel Corp (NYSE: X)
X One-Month, One-Hour Candles Chart; SteadyTrade
- For broader exposure to the sector, look at ETFs like VanEck Steel (NYSE: SLX).
Look for pullbacks when initial reactions fade—traders often overreact to tariff news before the real winners emerge.
U.S. Retailers and Consumer Goods Companies:
When tariffs target imports, especially from China, the cost of goods rises for companies that rely on foreign manufacturing.
The big retail names can see their margins squeezed.
But don’t assume every stock will tank. Companies with strong pricing power or diversified supply chains can weather the storm better than others.
Walmart Inc. (NYSE: WMT) is a prime example and is already on my watchlist.
Walmart Inc. (NYSE: WMT)
WMT One-Month, One-Hour Candle Chart; SteadyTrade
Other Potential Trades:
- Short positions on retailers are heavily dependent on imports.
- Look for options trades—puts can be a great way to profit from the downside without exposing yourself to unlimited risk.
Precious Metals
Tariffs create global economic uncertainty, and when that happens, traders often rush to safe-haven assets like gold or silver.
Potential Trades:
- Go long on gold and silver using ETFs like GLD or SLV when uncertainty spikes.
Focus on Technical Setups
While understanding the macro economic situation is important, don’t forget the basics…
Price action and volume tell the real story. Here’s how to spot good trades:
Watch for breakouts:
Tariff news can push stocks through key resistance levels.
Monitor VWAP:
I’ve said it before, like on Friday, and I’ll say it again—VWAP is a trader’s best friend. It’s perfect for identifying momentum plays.
Keep an eye on relative strength:
Stocks that stay strong despite market-wide tariff sell-offs are often the ones to watch for breakouts.
Stay Flexible and Be Ready to Pivot
Tariff-driven trades can be quick, and sentiment can flip in an instant.
One day, a company might be a winner, and the next, it’s taking a hit due to retaliation or new policy updates.
That’s why staying flexible is key.
Here’s the best way to manage these trades:
Set tight stops:
Don’t let a trade turn you into a long-term bag-holder.
Take profits when they’re there:
Tariff news can create short-term spikes, but those gains can disappear just as fast.
Stay informed:
Monitor headlines and government updates.
Platforms like StocksToTrade can help you stay on top of breaking news and price moves.
It features real-time data, charting, technical indicators, a paper-trading environment, and more.
RIGHT NOW, you can get two weeks of both the STT platform and our Breaking News Chat service for $17.
Grab your 14-day StocksToTrade + Breaking News Chat trial today for only $17!
My Final Thoughts…
Tariffs bring uncertainty, and with that comes opportunity.
But don’t get caught up in trying to predict every move or outcome of a trade war. Instead, focus on the price action, volume, and key sectors that have the potential to move.
Keep your setups simple, your emotions in check, and be ready to adapt.
Trade what you see, not what you think!
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
We are just days away from a historic price catalyst for Bitcoin.
Tim Sykes’ top student and now trainer, Jack Kellogg, has some crypto trade ideas…
But not for Bitcoin itself.
Jack has already turned Bitcoin’s price movements into massive penny stock gains.
Discover his top stock idea on Wednesday, February 12th at 10 AM Eastern. You’ll get the name and ticker symbol…
But you have to be there!