As the last article discussed the overall view of the financial markets in 2016, this article aims to specifically discuss the stock market.
We have insisted the easy market fuelled by the QE is already over, and the stock market will face difficulties and uncertainties. The following three remarks conclude our general forecast for the US stock market:
- The upside is limited due to rate hikes and the strong dollar
- A sudden plunge can always happen, presumably by 10-30%
- It still take a while till the total collapse of the QE bubble
In such a situation, mere buying or selling cannot be profitable. Both of short selling and the long-short strategy have some flaws. Then what can we do? After long contemplation, our conclusion is as below.
Continue reading 2016 stock market forecast and stock option strategy: Crash or flat, that is the question