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Trading Lessons

The Stock Market During A Government Shutdown

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Written by Timothy Sykes Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs
Updated 10/1/2025 4 min read
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The U.S. Government shut down yesterday, Wednesday, October 1.

Congress was unable to reach an agreement over enhanced Obamacare subsidies. And as a result, most federal workers began their suspension from work on Wednesday morning.

Prior to the catalyst, as the shutdown loomed, news articles circled about the implications of a shutdown for the stock market.

The general consensus was that the stock market rarely feels an impact from political shutdowns. Due to the fact that most shutdowns only affect federal workers and don’t last very long.

But this shutdown could be different …

There’s already rumors that it will last longer than usual, as democrats and republicans fight for ground in an extremely polarized congress.

But there’s currently no effect on the market, as major indices pushed to new all-time highs yesterday, October 1.

Look at the S&P 500 ETF Trust (NYSE: SPY) chart below where every candle represents five trading minutes:

SPY chart mutli-day, 5-minute candles Source: StocksToTrade
SPY chart mutli-day, 5-minute candles Source: StocksToTrade

There are market opportunities while the Government is shut down.

I have my eye on a specific sector right now as the political instability grows.

There’s no use worrying about the shutdown …

How To Trade It Instead

When Governments shut down, it causes distrust.

And when people trust the U.S. Government less, it means:

  • There are fewer people buying bonds.
  • The U.S. dollar is less of a safe haven.
  • And alternative assets look more attractive.

We’ve already seen this in the market as a direct result of this most recent shutdown.

Look at the headline below:

Source

Gold isn’t the only asset that tends to climb as trust in traditional assets wanes …

More Breaking News

I’m also watching the crypto sector right now.

But I’m not buying actual cryptocurrency. Instead, I focus on stocks with exposure to the crypto market.

Already this week:

  • Beneficient (NASDAQ: BENF) spiked 190%* after it announced bullish fourth quarter financial results. It’s a fintech company that focuses on alternative assets.
  • Sky Quarry Inc. (NASDAQ: SKYQ) spiked 80% after the company announced a digital asset treasury.

And right now, I’m watching Bitfarms Ltd. (NASDAQ: BITF) as it consolidates below the $3.60 breakout level.

Look at the chart below of BITF where every candle represents 15-minutes:

BITF chart multi-day, 15-minute candles Source: StocksToTrade
BITF chart multi-day, 15-minute candles Source: StocksToTrade

I’m not buying shares of this stock randomly. I need the price action to match a specific pattern before I build a position.

In case you were unaware, cryptocurrency is volatile. And that volatility seeps into the stock market as well.

That’s why I don’t want to hold shares of BITF at a bad entry. I could get squeezed out for a loss before the real move starts.

Instead of trading blind, I want the stock to match this pattern. Watch my video below:

Pay attention to volatile crypto stocks this week as the shutdown continues.

Cheers

 

*Past performance does not indicate future results

 

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity.
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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”