The Dow Jones Industrial Average, and any other blue chip index in the US for that matter has been off to a rough start this year. After China's market tanked on the first day of trading in the new year, global markets followed. In late January, we started to see a slight recovery. However, on Friday the Dow fell further after the US jobs report became available. Today, we'll talk about what we saw from the US jobs report, how and why it affected the Dow, what we can expect to see from the index moving forward, and how binary options traders can take advantage of the trends.
US Jobs Paint A Grim Picture
When predicting what's going to happen in the US market, it's incredibly important to pay attention to economic factors like jobs. We'll talk about why later. Nonetheless, on Friday, the jobs report for January became available, striking fear in the hearts of investors. While analysts expected to see the United States economy add 190,000 jobs, what we actually saw was far from this figure. Last month, only 151,000 jobs were added to the United States economy.
Why And How This Affected The Dow Jones Industrial Average
As mentioned above, when gauging what's likely to happen in the market, it's important to pay close attention to US jobs. That's because, jobs give us a look of how the economy in the country is doing. When economies are positive, businesses sell more products, leading to more demand for employees. Adversely, when economies are doing poorly, less jobs are added because less orders are made at companies. In the United States, positive economic conditions are signified by jobs growth in the amount of 200,000 per month. Unfortunately, what was reported for January was far below this mark!Signifying economic struggles to come in the states.
Naturally, when the US economy is doing poorly, we can expect to see lower sales among publicly traded companies, leading to resistance in the market. As a result, we tend to see downtrends following poor jobs reports. That's exactly what we saw Friday when the US jobs report was released. After a tumultuous day, the Dow closed at 16,204.97. This signifies a decline of 211.61 points or 1.29% on the trading session.
What We Can Expect To See Moving Forward
While I would like to say that we've reached the end of the declines, that simply wouldn't be the truth. In my opinion, I'm expecting to see more bearish activity in the US market as well as the global market. The reality is that the global economy is struggling, putting pressure on the US economy. In fact, if things continue this way, we're going to see the next recession this year. As mentioned above, when economies perform poorly, we can't expect much positivity in the market.
How Binary Options Traders Can Take Advantage Of The Trends
As binary options traders, it's our job to predict what is going to happen with regard to movement in values of financial assets. Given the current circumstances, this job is relatively simple. The Dow is likely to continue to decline. So, binary options traders should be looking for strong put option opportunities. Also, traders should look around for correlated assets. For example, the S&P, NASDAQ, and several assets are likely to follow the Dow's lead! So, looking for put option opportunities on these assets will help you to expand your earnings!
What Do You Think?
Where do you think the Dow is headed moving forward? Let us know your opinion in the comments below!
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