Dow rebounds more than 500 points in one day! This is the sound of jaws dropping to the floor. It can only mean one thing Dow is about to make a big move. And, it is not surprising that experts are telling traders to get ready for a big move in Dow.
Dow is no stranger to making big moves. It had set a new all-time high when it opened higher than any other stock price on August 7th. But, it maintained that level for several days and then regained the lost ground. There can be many reasons behind this, some insiders believe that China might begin easing monetary policy which will boost the US stocks.
The US stocks have been holding up well despite the turbulence caused by the collapse of financial markets in Europe, Asia, and Latin America. There are many factors behind the strength of US stocks low unemployment, stronger consumer sentiment, fiscal policy, etc. The US market is far from being a key to understand the health of the global markets.
The next big event The Chinese government has released more economic data, some figures have been revised upward. The Consumer Price Index (CPI) inflation rose in May and June to the highest level since the late 1970s. This has led to higher inflation and stock markets have reacted in a sideways manner over the past few weeks. If the indicators are right, we may see a significant move in Chinese stocks during the upcoming US holiday season. This would benefit those investors who want to get in before the bounce in prices begins.
Will The Bounce? Well, if the indicators are correct there will be a major breakout in Chinese stocks during the fall. As the US markets have recovered and the bounce is over the timing will be right for an even bigger move. Whether this time is sooner or later will depend on how well the Chinese economy responds to the global recession and the stimulus package.
Will The Dow Break Up More Than 500 Points? – Well, we can’t say for sure yet. Dow has not been this high since July 29th, 2021. There was a time when the stock prices started falling right after the Federal Reserve Chairwoman signaled that interest rates were on the rise. Right now, the markets are waiting for a clearer signal from the Fed chairperson, which should occur prior to the end of the month.
Will The Dow Bounce Back? – There may be a correction to the uptrend that happens right after the Federal Reserve Chairwoman’s statement. It will take time for the markets to react. Traders should expect a small pullback in stock prices as the stocks start to head back towards the lower range of the market.
Is The Stock Market Headed for a Bear Market Correction? – This is possible if there is a major downfall in corporate profits and stock prices. If the unemployment rate continues to rise and inflation continues to rise at the rate it is supposed to, then we may see a correction to the uptrend. Many analysts believe that the unemployment rate may dip below 5% before the markets begin a correction.
Can The Dow Bounce Back More Than 500 Points? – It is possible that the Dow will be corrected back to higher territory faster than any other time in its history. However, it may take time for the stock to rebound. Right now, it is taking longer for the markets to recover from the recent economic crisis than during any other point in history. If there is no additional economic stimulus being implemented, then the stock market may not bounce back as quickly as many experts expect. Investors may hold on to their stocks for a little while longer.
How Long Should I Hold on To My Stock? – If there is no additional economic stimulus being implemented then it may take up to six months for the stock to return to new highs. During this time, it is a good idea to buy other financial assets that have higher returns. If you are concerned about the stock price losing more value in the future, then you should buy commodities like oil, gold, copper, wheat, and other commodities. As prices rise, they may continue to rise until they reach an inflection point. At that time, it may be best to sell your stock because there will be more risk if you hold on to it.
How Hard Will The Dow Rebound? – Although it may take more time for the stock to bounce back, there are several indicators that indicate when it may happen. One indicator is when the stock is closing higher than it opened. Another indicator is if the stock is trending upward, which typically occurs right before an upward trend reverses.
