By: Katie Gomez

Are traders getting gaslit by the government? If there is one thing traders know about the trading game, it is that the market (and those who have a powerful stake in controlling its sentiment) is never a fair opponent. However, once you learn its secrets and habits, you can start to predict it screwing you over. We can’t change the game but can change how we play it. It’s up to us to match its energy and manage our actions accordingly. 

Like a toxic partner, the market tends to drive you crazy. Just when you think you’re growing into a stronger trader, gaining momentum, and becoming more confident in your positions, the market starts to warp your reality and strip away that confidence. Have you noticed that once government information gets shared with the public, it’s followed by a revisionary period or two 30 to 60 days later? 

After the bureau or agency in charge announces the revised numbers for its economic data, for some reason, it always goes lower. As soon as we begin to hit our stride following reports of consumer sentiment the first time, the revisions always move downward or against what could be considered a good economy number a month later. Traders have hit their breaking point; the public is getting gaslit by exaggerated numbers for whatever reason by whoever is in charge, but they always seem to go down. While we might be unable to understand why these numbers are decreasing, we can learn to adapt. Sometimes, things are just out of our control, but that doesn’t mean we can’t learn to survive if we do not thrive in this environment. In this article, I will tell you how to benefit from this by peeling away from the herd and taking advantage of other opportunities. 

Short-term Opportunity Lower Risk Route

The first thing you must do to thrive during chaotic, unfair market periods like this is flip the script and change your perspective of playing the market. The market is not a linear game where all players adhere to its rules; it is a game of smoke and mirrors. Those who fall prey to following the herd and believing the only path is the one laid out to them only perpetuate a vicious cycle of excitement and disappointment. As you become more experienced in the market, you see there is always a silver lining to every supposed storm. In this case, this shift will require traders not to focus on the numbers at hand or how they will change but on the short-term window of high sentiment it evokes. 

Economic data can take the form of inflation data, PPI and CPI, job reports, or GDP. Whatever the source, the data is released one hour before the markets open and often jumps higher in pre-market on the overexaggerated data. 

When you expect big numbers to come out, you can expect them to be as good as they get. So, instead of focusing on what the data released says, use this heightened market state to your advantage by diverting your focus elsewhere. 

If you’re looking for a reason to take profits, markets tend to gap up extremely strong on the day those numbers are released. You can use this as a catalyst to sell stocks or other assets you are ready to sell. If you have a stock, you’ve wanted to sell, sit and wait for the jobs consumer price index and sell at the open on the exaggerated data when SP500 gaps up. 

In other words, it’s a short-term opportunity to sell something you want to sell if you focus on the day(s) of significant data releases. Even after the data is revised 30 and 60 days later, the market still goes up because it follows sentiment more than statistics. Therefore, once you understand the market’s funhouse mirror complex, you can learn to play the game from another angle. In this case, while other traders are following the numbers, you are following the people, taking advantage of a short but potentially lucrative period to sell. 

Higher Risk Route (Experienced traders)

On the other hand, if you are a short seller, You can use the initial euphoria of whatever instrument, vehicle, asset, stock, or ETF, whatever it is that bounces significantly from this euphoric sentiment burst, from that number, you could strategically take the opposing side after a couple of days you short it. Short selling can be tricky, and not every trader can pull it off, but that is the best way to successfully short something: wait for a big bounce and then take the short after the rollercoaster has built itself up. Again, this will require more insider experience and expertise to learn the right tools and instruments to trade in. 

In conclusion, remember these critical points:

• Market sentiment often matters more than actual numbers
• Initial economic data releases typically present selling opportunities
• Revisions tend to be downward, creating potential short-selling scenarios
• Trading psychology and patience are crucial for success
• Risk management becomes even more critical in manipulated markets

By maintaining awareness of these manufactured market cycles and adjusting your strategy accordingly, you can transform what many see as a frustrating aspect of modern markets into a reliable trading advantage. The market may not be fair, but it is predictable in its unfairness – and therein lies the opportunity.