Trade with strict stop-loss, Anil Singhvi warns, as stock markets turn volatile
The Dow Futures on Thursday ended in the red, down by almost 200 points. Though, the fall was arrested to some extent. And this was despite the fact the US GDP numbers went up and there were fewer unemployment claims filed. It has emerged as a major worry even as the top five IT companies there posted better than expected results
The Dow Futures on Thursday ended in the red, down by almost 200 points. Though, the fall was arrested to some extent. And this was despite the fact the US GDP numbers went up and there were fewer unemployment claims filed. It has emerged as a major worry even as the top five IT companies there posted better than expected results.
What is the reason behind this muted reaction? Will the markets not react till the time US elections are over? Zee Business Managing Editor and Market Guru Anil Singhvi explains the phenomenon!
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Volatility is the biggest determinant of mood of the US markets, much more than the movement, be it upward or downward, the Market Guru opined. The volatility is indeed, worrying.
Significantly, the Market Guru further said that it is also the biggest indicator of a trend reversal.
Global markets are having an eye on two factors viz the rising number coronavirus infections and the US election. These are two reasons why there is volatility and also why markets are not reacting on positive news.
The elections are wide open, and it cannot be said with certainty as to who would win. The markets don’t like uncertainty.
The unknowns are the biggest cause of volatility which trigger sharp reactions.
The Managing Editor’s advice to domestic traders and investors is to be cautious and follow the global markets. Whatever lead the US markets made on Thursday are neutralised by the weakness in Dow, he further said.
It is not that only the equities are falling, the commodities markets are also weak. The gold is looking to come down below USD 1900. Most of the asset classes are seeing profit booking, he said.
He said that the investors should trade with strict stop losses. For people who want to put fresh money, should wait for the first opportunity of trend reversal.
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Global markets are indicating that the investors need to remain cautious.
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