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
This is the first article of a series, “How to trade options”, which explains how to trade options and what they are. First of all, we explain here the basics of call options and put options.
Options are a way to gain a profit in a market that neither constantly goes up nor goes down. With a long-lasting market trend such as stocks after 2008 or gold after 2012, bullish or bearish, you may simply buy or short sell a financial instrument.
On the other hand, when you know a market will not move for a while or when you know it will be volatile but do not know if it goes up or down eventually, neither buying nor short selling will give you any profit. However, with options, you can gain a profit even in such a market. This is why we explains here about options.
Continue reading How to trade options : what are call options and put options?
Bill Gross, a famed bond fund manager of Janus Capital, explained in the Twitter account of Janus Capital about how to trade in the very volatile stock markets.
Earlier this year, Mr Gross also successfully predicted the bear market in German bonds and the plunge of the Chinese stocks. He is without a doubt one of the greatest investors who correctly understand the market situation before the Fed’s rate hikes, the opinion of whom is worthwhile to follow.
Continue reading “Bond King” Bill Gross explains how to trade in equity markets amid the turmoil