Aug 26, 2014, (9:25AM EDT)
The French government has resigned and their stock markets are rallying. What do you call this? Bubble ? Speculators’ market?
How do you trade a market that rallies on bad economic news and drops on positive news?
I don’t know. If you do, then please teach me as well 🙂
U.S. stock futures and European markets are back in the green after a few negative numbers from the U.S. economy. All these rallies are spurred by hopes of an asset purchasing program by the ECB. It does not matter that the ECB president Mario Draghi keeps promising “to do whatever is needed” and actually does nothing ! Markets rally only on his words! I call it the “Draghi drug” for speculators 🙂
This “drugged rally” is not going to subside till next Thursday when the ECB will hold its monthly meeting and declare its intention about improving a slugging euro zone economy.
And if you are wondering why I’m writing about European markets in a post intended for U.S. markets, the reason is, that U.S. markets are also following the same path; rallying on the ECB QE hope.
So today, as U.S. markets will receive many more reports through the session, expect a highly volatile trading pattern where bad numbers will make markets jump up and good numbers will stall any movement. U.S. indexes are expected to trade within the high and low levels of their last session. S&P 500 is at historic levels and buyers have disappeared so higher levels might present an opportunity of selling short.
Good luck and have a great day in stock markets today!
See you later.