First Week of 2016 Sees Record Losses

The first week of 2016 was one of the worst weeks in history for the stock market. The Dow Jones Industrial Average fell by more than 1,000 points, effectively going against the January Effect that everyone had expected after such a rough end to 2015. For those that looked to binary options as their trading source, the general theme was unpredictability. Even those that focused on the tiny technical indicators had a tough time of moving forward. This were far too shaky for these usually reliable methods of trading to gain any sort of foothold. Many people found that it was just easier to sit out for the week rather than trying to guess something that showed no signs of predictability. Others tried to hop on the downward trend and profit off of sentiment.

We keep Moving DownShort term traders that had been trying to find an easy boost to their profits were hit especially hard by this. It’s very easy to say that because January always starts out with stocks and indices moving upward that this year would do the same. Continue reading

Is Oil in a Freefall?

Oil prices have dropped considerably over the last couple years, and this has had a big impact upon oil producing countries in the Middle East. Countries like Iraq, the United Arab Emirates, and Iran have seen big problems within their economies because of the falling prices. Some, like Iran with their nuclear program, have begun developing alternative methods of energy production.
A recent evaluation has shown that there are many other nations that are getting set to release oil reserves right now, and a spike in the supply when prices are already down will only drive prices down even more. Continue reading

Good News in Greece

It’s funny how sensitive the U.S. stock market is to the ongoing drama in Greece. However, on a hopeful day, U.S. markets tend to soar as of late. On Monday, June 22nd, Greece outlined a new plan that seems to be much closer to what their lenders are looking for. As a result, U.S. based investors had more confidence, sending the NASDAQ Composite to record highs, both for intraday trading and a record closing price. Major stocks like Apple ended up big, too. Apple closed 0.88 percent higher than it ended Friday. Biotech shares also went up quite a bit. One major ETF ranked the sector as going up 1.5 percent.

Major indices all over Europe went up in like. The German DAX went up about 3.5 percent, the STOXX Europe 600 went up 2 percent, the ATHEX Composite went up over 9 percent, and the U.S. based Russell 2000 went up to hit both intraday and closing high prices. Continue reading

A Weak Indian Rupee is a Good Thing

The Indian rupee (INR) has not been highly in demand lately. Since April, the rupee has been sliding lower and lower. It’s currently hovering right around its three month low point when compared to the U.S. dollar (USD). This is news that can be interpreted in a number of different ways, so let’s unpack two of the big ways that this has had an impact on short term traders.

First, in India itself, a weak rupee is considered to be a sign of political weakness. That sets the stage for Prime Minister Narendra Modi to be in a rough spot come the next election.

Second, it sets the stage for the Indian economy and the businesses within it to boom. In the United States, there is a negative correlation between how the stock markets perform and what the dollar does on the international stage. This means that on a general basis, when one goes up, the other goes down. It’s not a perfect negative correlation, as seen by the last several months, but it is more of a generality. The same holds true in India. When the rupee goes down, then the economy is set to go up. Continue reading

Replacing the Emerging Market Sector

In the past, the emerging markets sector was the place to put your money. It was high risk, yes, but it also had been creating big returns for a few years. While the rest of the conomy was pumping out 2 to 4 percent returns, you could go up above 10 percent if you put your money in the right emerging markets fund.

Those days are now gone. The emerging markets have been going forward at a painstakingly slow pace, if at all, over the last several years, and now, many experts are saying that it’s time to completely get rid of your long positions here. Because of the instability in the Middle East and Russia, along with the economic uncertainty in Europe, the emerging markets seem like they are going to take a long turn for the worse. Toward the end of 2014, this sector took a bigger than expected rise, but this was largely due in part to end of year action, a phenomenon that is felt throughout the entire world marketplace. 2015 doesn’t look quite as promising.

The downside of this is that the emerging market sector–basically any stocks that focus on countries that are located in areas where the markets stand to see a lot of improvement (usually developing nations)–have long been the place that long term investors put their money to add an extra dimension to their portfolios. Continue reading

Energy Prices are Falling

Energy stocks have been falling in price, as you might have noticed by looking at gas prices when you drive by the gas station. Crude oil, from which gasoline is derived, is just but one area where energy comes from. As oil prices drop, we might be thankful for the relief at the pump, but energy companies rely on these profits in order to succeed in the business world. Shale oil stocks are suffering right now thanks to disappearing profit margins and investors lacking confidence in them.

The price of oil has been going down steadily over the last few weeks, but on Friday, the price per barrel fell by about 10 percent, down to around $66. That’s the lowest it’s been in over four years.

For a country like Saudi Arabia–one of the world’s leaders in oil exportation–low prices are not a huge issue. They have the wealth to withstand significant drops in oil for many months. However, other oil producing countries do not. These countries will likely see widespread economic problems if this goes on for much longer. Looking to these countries and making sure that falling prices do not hurt your portfolio or future trades is a prudent idea. Continue reading

Have We Reached the Top?

Use Redwood TradingA popular financial commentator announced recently that it is the individual investor that is beating the market right now rather than the professionals. Dennis Gartman revealed this in a television interview a couple days ago, although his reasoning doesn’t seem to be exhaustive. Still, he has a good point. With the way that markets are set up right now, and the audiences that the professionals serve, there are many more money making opportunities open up to the little guy than ever before. You no longer need to have a billion dollars to be able to make a profit in the markets, just enough to comfortably set aside so that you don’t need to dip into your market money any time soon. Once you reach this point, and have some studying and observing under your belt, making money in finance has never been easier.

This assumes that you have a firm grasp of what you’re doing, though. Trading and market predictions are not easy. You can make these things easier for you, though. Paying close attention to a few assets over time will give you a better idea of how they act and react when other things occur in the marketplace. This sort of specialization will eventually make you an expert on a few stocks or other types of assets, Continue reading