According to Rockwell Trading experts, the US markets are in the doldrums but fear-based sell-off still creates buying opportunities.
The pressure continues to mount on U.S. markets amid Hurricanes and tensions between North Korea and the United States. Debt ceiling has provided a brief support to trader’s sentiments, but strengthening yen and euro along with the combination of factors are weighing on investors' minds. But it’s the perfect time to chase the opportunities, the experts say.
Smart investors like to buy stocks and assets when other fears. This is exactly the situation where traders can capitalize on several profits making opportunities, as a mixture of short-term factors has been rolling over the U.S. stock markets.
The Dow declined 22.86 points to 21,784.78 and the S&P 500 drop almost 0.02% in Thursday’s trade, weighed down by telecommunication, financials, and the consumer-discretionary stock.
U.S. Dollar, which is currently trading at the lowest level since January 2015, slashed only due to external factors, including the Hurricane and tensions over North Korea - but more is yet to come.
U.S. markets are likely to extend losses in Friday’s trade because investors are likely to close their short-term positions going into the weekend when North Korea is likely to test new nuclear missile during the Founders Day celebration.
Hurricane Irma is yet another factor weighing on traders sentiments and crude oil prices. Irma comes just after two weeks of Hurricane Harvey, which had made damages up to $190 billion in Texas. Though Hurricane Irma downgraded to Category 4, it still has the potential to create bigger damages in Florida.
For those wondering, the question may be if it is a buying opportunity. For options traders, markets look certainly predictable. Safe haven assets, including Gold, will move higher, while energy stocks, the U.S. dollar and the sectors such as financials could continue to decline. But this is a short-term scenario looking closely at market fundamentals.
Therefore, creating positions in volatile stocks, the U.S. dollar and other assets, those are affected only due to natural disasters and political instability looks like a wise strategy.
Overall, U.S. markets are showing several negative factors that could be a reason for traders fear, but investors should keep one thing in mind that is the "decent economic growth”. Traders can call the latest selloff a fear-based sell-off, which has created attractive buying opportunities for smart traders. Check out http://rockwelltrading.com/prcoffee to hear about these and other updates from Rockwell Trading experts live.
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