17 January 2018 (8:38 AM IST)
16 January 2018 (10:09 PM EST)
U.S. stock markets saw a sell-off from overnight session’s high levels after a big gap up opening and Dow Jones touching historic number of 26,000. The index took only 8 sessions to reach form 25,000 to 26,000. Is Dow Jones- and broader U.S. stock markets- in a bubble?
This stupendous uptrend in U.S. stock makes one suspicious that yes, it could be so.
Probably that is what most of the investors thought and U.S. stocks suffered a big sell off in their overnight sessions. In numbers, Dow Jone is showing only -10 points loss for the day, but actually, on charts, Dow Jones is showing an intraday loss of nearly -400 points from day’s high (26,086) to day’s low (25,702) level. And, this drop cane with bigger than usual volumes.
Cryptocurrencies, that are a big bubble, are now selling off once again. Bond yields are rising as bond markets also see a selling pressure.
As a result, most of the major Asian stock markets are trading negative today. SGX Nifty is also just below its previous closing, indicating a flat or negative opening in Indian stock markets today.
All these factors indicate that day traders should be careful and must keep a strict stop loss in all their positions because market volatility is increasing. Also, the trend is turning choppy so trade with only short term trend, within major support and resistance levels of your local index or stock.
Gold is rising, which indicates that big investors are turning to this safe haven to park their money. And when big investors are being cautious, then small traders like us should also be careful while trading in stock markets.
This is how global stocks had started their session yesterday, and things were so different!