Adapt Your Trading Style
stagnant situation can be boring for some, yet very profitable for others’
The U.S markets continued trade within range last week, closing Friday’s session at critical levels. News headlines had a major impact on the trading sessions, as U.S officials mentioned that they could be ready for round two, using further stimulus to combat the economic situation.
Tuesday’s session turned out to be the most volatile one, as the government released its PPIP program, another scheme which derives from the TARP program to help clear the toxic assets off bank’s balance sheets. Furthermore, President Barak Obama mentioned that another stimulus package could not be ruled out, especially due to the slow rate of recuperation.
The news had an immediate effect on the markets sending traders into safe-haven, as according to some further stimulus could be devastating for the U.S economy. On one hand, further stimulus would increase the U.S’s debt and could devaluate the Dollar sending it to lower levels. On the other hand a weaker Dollar could be the U.S’s solution; especially as President Obama mentioned that he intends to turn the economy around, diversifying its structure. As mentioned by the President at the start of his cadency, one of his major aims is to build an economy, that’s profits are not only through its financial sector, either through exporting real goods.
One must note that a weak Dollar might not be so good for financial investments yet it can be good for the U.S economy, because it makes American exports cheaper and therefore helps close the trade deficit.
The uncertainty regarding the economic recovery was characterized by lackluster sessions for the remainder of the week, as the broader market presented doji like candlesticks, closing just above critical support levels. The S&P500 finished the week with a mild loss of -1.93%, while the Dow Jones closed it’s forth week down, with a loss of -1.62%.
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