If you follow Deutsche Bank and you are a fan of bear markets, now is a time to start getting excited. In a recent interview, representatives from the bank stated that they believe that we are officially in a bear market, and that stock prices are going to keep dropping for the foreseeable future. While a bear market seems likely, anything worse than this is still up in the air. As one representative from Heartwood Investment Management says, the U.S. economy is anemic, but not failing. However, things need to change if a full on recession is to be avoided. To get a better feel for a negative scenario, let’s explore the Deutsche Bank statement.

There are a few things to watch for if what is being warned of is, in fact, true. First, the typical bull market lasts about seven to nine years. The one that we are supposedly just coming off of fits within that range. ...continue reading →

It’s the kind of trade that every single trader has dreams about. The exposure only lasts a few minutes, but because of a perfected style and split-second timing, tons of money was made. In this case, over $200,000. The reason why the trade was so successful was because this trader was able to watch the news, anticipate how markets would act, and then timed everything done in an almost too good to be true way.

On Thursday, June 18th, it was announced that Sequential Brands Group might be buying up shares of Martha Stewart Living Omnimedia. Within a couple seconds of the announcement, a moment before trading was halted, someone was able to buy 2,600 call contracts, most of which were set to expire the next day. On a day where only about 50 of these contracts change hands, this was an exceptionally large number--and from just one person. ...continue reading →

It is worth noting that the Federal Reserve isn’t always right. In the United States, the Fed is the main decision maker when it comes to the major financial decisions. They control interest rates, lending to the banks, and so on. Right now, as the nation’s biggest indices grow higher and higher in value as the stocks that back them up keep soaring upward, it is a good idea to realize that the Fed has yet another decision to make when it comes to interest rates. The whole point of lowering them was to increase borrowing by big business. And now that these companies are doing better than ever, is it smart to keep rates at the low point they are now? For months, analysts have been expecting the Fed to say that rates will be going back up. But, when will they?

There’s a big problem within the Fed. Not big as in it will lead to the economic collapse of the United States, but big as in it is limiting the way that the economy might potentially function. ...continue reading →

A recent news story read that China had proposed to the International Monetary Fund that the yuan become a reserve currency, and then the rest of the article speculated that this was a move that would devastate the U.S. economy and cause the dollar to become worthless quickly if it were to happen. The truth is, a catastrophe is a possibility, but not a likelihood. There’s always a chance that a currency can fail, even one as widely used as the U.S. dollar, simply because the dollar is just a piece of paper with some pictures and numbers printed on it. The dollar has value because people trust in it, and they trust the government and the organizations backing it.

There are a lot of little things that can be pointed to to “prove” that economic collapse is imminent. China wanting to make their currency in order to help out their economy is not necessarily one of them. While it’s true that China would benefit from the U.S. economy being weakened, so would every other country that relies upon U.S. produced goods within their economy. ...continue reading →

Over the last few days, European stocks have been doing quite well, but that has now come to an end for the time being as the European Central Bank has had to intervene with Greek loans. Greece has had some major debt problems over the last several years, and officials from this country are currently in negotiations with the heads of the EU and IMF financial authorities. 2015 is a big year for Greece financially because of the massive amount of money that becomes due over the next few months--a total of about 9 billion euros. With talks failing for the time being, though, the three day rise in European stocks ended, although not nearly as badly as it could have. Stocks remained only slightly changed at the end of the trading day.

There is a very strong correlation between the U.S. stock market and the dollar. The correlation is a negative one, meaning that when one goes up, the other goes down. When it comes to the euro, the situation is different, mostly because the currency is used throughout many different countries and stock markets. It is centralized by the ECB, but in a much looser manner than what happens within the U.S.

Interestingly enough, there is a strong correlation between the euro and the U.S. stock market, so much so that many professional traders use the euro’s movement early in the day to help them prepare for trading stocks in the U.S. once the market’s open in New York. ...continue reading →

An upcoming election always raises questions about how the economy will respond. Even a midterm election has an impact, and this year is no different. Instead of a President, though, this year’s focus is on just a few key U.S. Senate seats that are up for grabs.

As a general rule, when there is a degree of uncertainty in an upcoming election, stocks respond by dropping in price. The more important the election, or the more severe the uncertainty, the more negatively stocks will tend to respond. That may be part of the reason why the last few weeks have been so chaotic on Wall Street. There are obviously a lot of other factors at play here, but this fact has definitely not helped the situation. Luckily, resolution is coming soon to this election and at least a tiny bit of normalcy will be restored.

Some election outcomes are predicted to be better than others. ...continue reading →