The NASDAQ, like any other index has been an incredibly interesting asset to watch throughout the first half of the year 2016. In the beginning of the year, the bottom fell out of the global market as China's blues weighed heavy. However, since February, we've started to see gains, and when it comes to the NASDAQ, gains have been incredible. In fact, the index is now nearing record highs again as analysts start to use the term “Tech Market Rebound”. However, is this really a tech market rebound or is it more of a bubble? Today, we'll talk about what we've seen from the tech sector throughout the year, whether or not I believe this is a rebound or a bubble, what we can expect to see moving forward, and how binary options traders can take advantage of the trends.
What We've Seen From The Tech Sector This Year
If you look at the NASDAQ, the first thing that's likely to come to mind is that the tech market is rebounding. However, it's hard to imagine that this is actually the case. Throughout the first half of the year, exports have been absolutely horrible, for the tech sector and just about any other sector.
One thing that I do often when looking into tech is look into tech's largest companies. You know, companies like Apple, Google, Facebook, and more. While Facebook is doing well, Apple is struggling in a big way. In fact, declines in iPhone sales have become incredibly concerning. When it comes to Google, economic hardships around the world have caused decreasing growth in cost per click in online advertising, the company's biggest revenue driver.
Unfortunately, Apple and Google aren't the only companies struggling through rough economic times either. Twitter, Netflix, LinkedIn, and several others in the sector are feeling the stress associated with a poor economy. All in all, we haven't seen much by way of positivity out of the tech sector throughout the year.
This Is A Bubble
While there are several finance professions that are screaming “Tech market rebound”, it's important to read between the lines. The reality is that the market is rebounding because investors are willing to take on larger risks in return for gains. After all, there's not much of a choice under current market conditions.
Unfortunately however, this is an incredibly dangerous action. You see, with poor earnings in the tech sector as a whole so far this year, there's not much justification for the growth we've seen in securities. In all reality, the NASDAQ should be falling, not gaining.
What We Can Expect To See Moving forward
Moving forward, I don't have a very positive opinion of what we can expect to see from the NASDAQ. While in the short term, an unhealthy appetite for risk among investors will likely continue to push the index upward, the long term outlook is concerning to say the least. After all, every bubble will eventually pop, and the tech bubble that is forming is no different.
How Binary Options Traders Can Take Advantage Of The Trends
As binary options, our job is relatively simple. It's up to us to spot trends and make trades to take advantage of those trends. At the moment, the NASDAQ is gaining, and investor excitement is likely to continue pushing the index up in the short term. So, over the next couple of weeks, binary options traders should be watching for strong call option opportunities. Nonetheless, it's important to look for a reversal. As mentioned above, there is no fundamental backing to the current bullish movement. So, we can expect a reversal down the line that will generate incredibly strong put option opportunities.
What Do You Think?
Where do you think the NASDAQ is headed moving forward and why? Let us know your opinion in the comments below!
[Image Courtesy of Wikipedia]