Is The Bear Market Over?
Throughout the majority of January, the global market has been spiraling out of control. However, on Friday, we finally started to see gains, leading many investors to ask… Is the bear market over? In my opinion, the answer is no! Today, we'll talk about why I don't believe we've seen the end of bearish trends as well as how binary options traders can earn money moving forward.
What Started The Bear Market
Before we get into why I believe that the bear market is far from over, it's important that you understand just what caused the bear market in the first place. So, that's where we'll start. Here are the factors that played a role…
Economic Conditions – Economic conditions around the world are currently very poor. When economic conditions are poor, consumers look for ways to save money. So, we tend to see a lot less spending, leading to pain for corporations as earnings and revenue come in below expectations.
China – China's market conditions are being blamed for the entire bear market. While I disagree that China is the only driver of downward trends, it's clear that turmoil in the country's market is playing a role in what we're seeing from the market as a whole. After all, China is the world's largest importer of raw materials and the world's second largest economy. So, when China struggles, the world struggles. On the first day of trading in the new year, China's market crashed, creating a domino effect that markets around the world ended up feeling.
Oil – The global oil supply glut is nothing new to investors. After all, we've been dealing with the problem since late 2014. Unfortunately, low oil prices are leading to issues elsewhere in the market. You see, the value of oil dictates the amount of money made by energy companies. When oil is low, the energy sector struggles, and that's exactly what we've seen for over a year now.
Why The Bear Market Is Far From Over
While I would love to tell you that the bear market is coming to an end, that's simply not the case. The reality is that none of the issues above have met a solution quite yet. While some of the world's largest economies have been enacting stimulus to improve conditions, the plans haven't worked. This includes China, meaning that we're likely to see a continuation in poor raw materials imports in the region. Also, in terms of oil, things aren't looking so good. With economic conditions in the dumps, demand is still incredibly low for the commodity. Also, when low oil prices hit, we generally see declines in production that support price stability. However, during this oil crisis, we've seen nothing of the sort. The world is still producing far more oil than it needs, so we're likely to continue to see declines in the value of the commodity. Between these issues, it simply wouldn't make sense that the bear market is coming to an end.
How Binary Options Traders Can Take Advantage Of The Trends
Given what we know about current market conditions, there are several opportunities available for binary options traders. First and foremost, oil as well as several indices around the world are likely to continue declining. So, purchasing put options on these assets will likely lead to gains. Also, under poor economic and market conditions, we tend to see gains in precious metals. So, watch these assets for solid call option opportunities to ride the trends upwards. Keep an eye on the latest financial news.
What Do You Think?
Do you think the bear market is coming to an end? Let us know your opinion in the comments below!
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