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Screenshot of a breaking news alert e-mail from Q2 2017
The following guest post is courtesy of Jens Chrzanowski, Regional German Director at FCA regulated broker Admiral Markets UK.
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No, my article this week isn’t all about my new favourite song by Jon Bellion (if you haven’t heard it yet, I strongly recommend giving it a listen!), it’s about the financial markets; US President Donald Trump; the European Union and so much more… So, let’s jump in!
As I sit here and type, the German DAX is performing extremely well and is currently running in the direction of a new all-time-high, hitting similar levels to that of the Dow Jones index over previous months. But many analysts are already warning traders about the impending “Trump Crash” and how investors can attempt to deal with such a slump.
Trump’s recent debacle with ‘Obamacare’ and the upcoming ‘Brexit’ discussions — a concern for the whole of Europe — are just a couple of the huge issues currently going on out there, yet the main stock markets, including the British FTSE 100, continue to go up and up. So, based on this, what should we should expect to see over the coming weeks? Will the markets continue to set new all-time-highs, or will the direction dramatically reverse and hit all-time-lows?
In Germany we say, “Versteh einer die Börse!”, which roughly translates as: “Can anybody really understand the markets?!”. Quite often the general mood and expectation surrounding the financial markets act as a kind of contra indicator—when people see only dark-times ahead, the markets are probably on the up and when people are ecstatically happy, it’s probably time to go short!
Maybe, after a while, the ‘Trump Rally’ that we’ve seen so far will slow down and change direction. Perhaps in a couple of months, when we have a little more clarity about the situation, the influence of Brexit will slow down the European, or British markets.
I hope we’ll soon get back to the days of selling on good news, and buying when prices dip. Such days made so much more sense!
So, next time you, or the markets, are at an all time low – maybe say to yourself: “it’s time to buy!”. And if people are running scared and see only dark skies above, don’t panic! Maybe the next rally is just around the corner…
See you next week!
Do you have feedback, concerns, requests, maybe even compliments? I’d love to hear. Please contact me via: [email protected].
Trading on margin carries a high level of risk, and this article should not be seen as advice or solicitation to buy or sell. It’s written for informational purposes only.