What is Going On with the Stock Market?
Last year’s market volatility has nothing over what companies and investors have witnessed so far this year. Markets have been suffering from the worst start in recent years and possibly in history. Many investors have pulled money out of the market in a panicked sell-off mode to avoid deepened losses. This of course only fuels the fire of market declines as stock values continue in free-fall reaction to investor concerns.
But are we truly witnessing a dramatic shift in market valuation or merely a long over-due correction that will soon stabilize or even trend upward in the near future? In truth it’s anybody’s guess what the future holds, as past predictions by analysts have experienced mixed results on accuracy of predictions. Personal experience and investing strategies that work for an individual day trader are likely as viable as advice that any all-knowing strategist can provide.
With the persistent volatility and increasing uncertainty for market segments in general many investors are moving to bond and treasury markets for their relative safety in the short term.
Where Will the Stock Market Go Next?
No one can predict with certainty where the market will trend next but there are valuable tools to assist in making investment decisions besides common sense. Frequently-used tools include market segment indicators such as the Housing Sector Index (HGX), the Volatility Index (VIX), and the S&P 500 Index (SPX). These indexes and others can be put to effective use in trade decisions.
For long-term investors most analysts are suggesting a ‘sit tight’ approach that exudes confidence that the market will spring back over time. A loss in value is not truly realized unless you sell at the degraded cost. Retaining your investment shares is one way to regain the value in your portfolio when the turn-around eventually occurs.
Another strategy is to take advantage of low stock prices to get invested in markets that were not attainable in prior months with inflated over-valued segments. Recent over-supplies of oil that have resulted in prices lower than we’ve experienced in over a decade present opportunities to buy into oil stocks that analysts forecast to increase in 2016.
Other considerations for investors and day traders include the declining Chinese economy and low oil prices. With lower gasoline prices consumers can be left with more income available for retail spending and luxuries such as vacations. That implies opportunity for investors in retail and hospitality market segments.
Volatility always presents day traders with opportunities to realize gains through getting in low and selling with even modest increases. Tracking market movements closely and using indexes to maximum advantage can generate profits even in such unpredictable markets as we’ve seen in recent months.
Stock Market and Day Trading
Day trading success relies on real-time information and careful analysis of trends and volatility. Online brokers provide clients with tools to keep on top of activity that can promote effective trade decisions and help to maximize the potential for profit.
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Disclaimer: SureTrader Blog is not intended for U.S. persons. Stock information is not to be viewed as buy or sell recommendations.