Global Stock Index Futures Trading – The “Doughnut” Breakthrough
For many years now, global stock exchanges have been caught by a very unstable economic climate for short-term traders and investors, with the spotlight now being on the impending trade war between the US and China. But the ink has hardly been dry on this one either, with Chinese authorities making threats of economic retaliation to the US in case there is an American attempt to apply pressure into their economy. In order to get themselves out of the international spotlight, China is looking to the ever reliable European markets to prop up their stock market. Here are some details about the potential impact of European Union involvement with China:
The European Credit Crisis. China has long had a relationship with the European Union (earlier this decade, they were the world’s largest buyer of goods), and they’ve enjoyed a steady rise in commerce with the EU over the past twenty years. Now comes the test of whether or not the EU will bite the bullet and do something meaningful to relieve its debt burden, and if so, how. For several years now the European Central Bank has been buying up large chunks of sovereign debt of member states, in the hopes that this approach would encourage other countries to rework their own debt problems – a theory that was (and remains) questionable at best. If China believes the ECB can effectively move the needle on debt relief through its purchases of European debt, then they may be ready to make their move.
European Recession. If China’s buying spree in Europe was just a rumor, it may be time for the European Commission to start worrying about its own economy. Global stock indexes have plummeted over the past year due to a number of global economic factors, including slower growth in the euro area and rising unemployment figures in several key nations. This has affected everything from the UK’s housing market to the Swiss and Portuguese treasuries.
With many investors concerned about the health of the European recovery, now is probably a good time to think about the state of the world’s largest economies. Many investors like to invest in the likes of oil, gold, and bonds, because these investments generally perform well during recessions or recoveries. In recent years, it seems that the bonds have done better than the oil. This has been an ongoing theme over the last few years as the world’s major economies continue to deal with high levels of uncertainty. With global stock indexes continuing their plunge, investors may be putting more weight on bond issues than they should. A possible replacement could be near.
What Comes in 2021? With the possibility of a U.S. bankruptcy in the near future, bond prices are expected to tumble, and the world’s major stock indexes could experience a sharp retracement. With signs that the U.S. economy may be on the verge of a second recession, is it a good time to purchase gold and invest in the emerging nations that make up the Asian tiger trade?
“Caroline Valetkevitch has been correct in predicting that the U.S. will suffer a second recession, this time of the sorts witnessed by Europe in the past two decades.” The Caroline valetkevitch voice is heard loud and clear, and her analyses are often quite accurate, although some of her forecasts appear overly bullish. Her ten-year outlook is simply too strong to contemplate a second recession at this point in the game.
However, a possible retracement could occur if the U.S. is not sufficiently supported by its own domestic market. If the European crisis continues to recur, or if the U.S.A. comes close to experiencing a recession, Caroline valetkevitch’s forecast could be overly optimistic. If the Caroline valetkevitch voice continues to speak in terms of overconfidence, i.e. “the U.S.A. can ride out the storm,” that might prove overly optimistic, as the market continues to show an overbought condition. The current overbought conditions in the U.S. are related to worries about the health of the consumer and a faltering U.S. economy.
Caroline Valetkevitch does indeed have a long way to go to win her millions, as she anticipates only a meager 0.3% return on her investment from the current overbought conditions in the U.S. market. In a recent article, Valetkevitch projected, “The economy will gradually recover over the next two years as consumers begin to feel more secure and back in control of their finances.” With global stock markets remaining so oversold, it may be a while before the correct parameters can be drawn to anticipate the actual performance of the markets. In the mean time however, it would appear that traders who are holding the futures and options on U.S. indices such as the Dow, Nasdaq, and AMEX may need to consider a short replacement or stop-loss order.