Unless you have your head in a box, you know the NBA finals are going on right now between the Orlando Magic and the Los Angeles Lakers. Thousands of words have been churned out by sports writers talking about which team is better, and the finale is set for Sunday night. If I was a betting man, and I’m not, I’m a stock trader, I would put my dime on LA. I happen to agree with a majority of polling results that they are a better team. That’s not to say I want them to win. I think the Magic are an underdog team that deserves a victory, because who can resist a great underdog story.
However, on Sunday night the Lakers could clinch the series. Personally, I think they won’t because a win at home just feels better, and the game has to move back to LA on Tuesday. If you were a conspiracy theorist and knew that the ratings were through the roof on this series, then you wouldn’t find it funny at all when Orlando wins on Sunday and Tuesday to tie it up, but LA pulls on the win on Thursday. We’ve got to keep those eyeballs glued to the set, right?
But this isn’t about basketball, this is about another game, day trading in the stock market. You should use your time to do some research because history has shown us exactly what happens when Los Angeles wins a championship. The city riots in celebration. The police are usually on hand to contain the damage, but there’s something about the series win that makes people destructive. One would think spontaneous dancing would break out, or free concerts or some other form of productive celebration. But no, the denizens of Los Angeles love a good riot in all its destructive glory.
When LA wins, LA burns.
Which companies are going to benefit from the burning? Insurance companies for sure, publicly traded towing conglomerates, sports apparel companies, you name it and they will benefit from a Lakers win.
This is where the rubber meets the road for most day traders, because the awesome boys in blue in LA can put the kibosh on too much celebratory destruction, and thus limit damages. Watch for number of cars burned, and determine which insurance providers are taking a hit, and which are going to be affected by the general market.
It would be worth your time to Google the last time LA won the series, what did the market do? How did the market react when an underdog won the NBA FINALS? Usually, that kind of jubilation is contagious and carries over onto the trading floor. Unless the damage is too severe from the riot…err…celebration, in which case it’s a solemn day for stocks.
See what history has to say about market reaction the winners, and set your plays accordingly. This is a short term trading window, so get in, get out and set your protection. And as always, keep checking back to www.insidetradingstocks.com for more tips, techniques and updates you can use to pad your portfolio with profit. Sign up for our free email newsletter to get more great tips delivered to your inbox that are jam packed with insider secrets the big boys on Wall Street don’t want you to know.
