In the stock market, fear is back – what investors need to know

"What goes up, must come down" – often this exchange is quoted saying, when it comes to an explosive Rally abruptly to a hefty Minus. Once more has come true

In the stock market, fear is back – what investors need to know

"What goes up, must come down" – often this exchange is quoted saying, when it comes to an explosive Rally abruptly to a hefty Minus. Once more has come true this spell.

After the woman previous days, the Dax fell on Thursday 4.47 percent. Worse still, it got the Dow Jones Industrial . The US leading index fell to of 6.90 percent. Also the S&P 500 and Nasdaq posted respective losses of more than five percent. Unlike the Dax, it ran in the US stock market but not the whole week bad. The two Tech-selection indices, Nasdaq Composite and Nasdaq 100 had reached on Wednesday set new records. DAX 11.949,28 PT. -21,01 (EUR -0.18%) Xetra

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To the rate of data

in fact the yesterday's trading day may be "historical". As the financial blog "ZeroHedge" reported that the so-called TICK Index yesterday set a negative record. The Index compares simply, how many of the approximately 2800 stocks on the New York stock exchange, NYSE, and how many just. In the top of the number of losers exceeded the number of winners to 2058. In may, the best TICK was reported-the value of all time. At that time, there were 2049 more growing stock than is the case, the end of the title.

It is Why the markets so suddenly crashed

it is thus no Exaggeration to speak of a market-wide sell-out. Why was the mood so suddenly? Two factors played a particular role: The infection rates in the United States, as well as dark signals from the U.S. Federal Reserve on Wednesday evening.

data from the U.S. Johns Hopkins University showed that the Infection rates in States such as Arizona, South Carolina and Texas to further easing have increased again. The fanning, in particular, there is the fear of a second wave of the disease Covid-19. With over two million cases and over 113,000 deaths in the United States suffer as no other country under the Coronavirus pandemic. Webinar with Marc Friedrich: How do you now protect your wealth

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Additional selling pressure brought the statements of the US Central Bank, the Fed. Chef Jerome Powell reiterated that the world is standing in front of a second "Great Depression" as some 90 years ago. However, the interest rate keepers expect the US economy to shrink this year to 6.5 percent and the unemployment rate is at 9.3 percent.

Because of this Outlook, most of the Fed's expected decision-makers so that key interest rates will remain until the end of 2022 at the current level of virtually zero percent. Also the multi-billion dollar asset purchases should continue "at least" resulted in the current pace.

the trend is for the low interest rates and abundant liquidity helped the stock markets in the past few years. At the same time, the Central Bank signaled with the interest rate Outlook that the economy will probably be felt for years in the aftermath of the Corona-crisis and, accordingly, has to be supported.

How now,

On Friday, the stock exchanges, attempted directly to a recovery. The Dax rose the least, a temporary loss of 0.81 per cent to 1.47 per cent, to around 12.150 counter. For the US Dow Jones index closed with a gain of almost 600 points is suggested, however, in the case of the Futures.

experts see in the coming weeks, but skeptical. "The extent of the Rally, it would shock me, if there is only a one-day sale and nothing else," said investment strategist, and Andrew Slimmon of Morgan Stanley to "CNBC". The professional added: "I suspect that it will in the short term, give more pain before the market will eliminate the excessive speculation of recent time." S&P 500 3.002,10 PTS. -188,04 (-5,89%) OTC

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Similarly, it is also Commerzbank analyst Thu Lan Nguyen. At least in Europe, the situation seem to be under control. "For a strong selloff on the markets, there is no reason therefore. But a seamless continuation of the Risk-On rally in the last few weeks, seems to be as little attached.“ Risk-On means the shift of investors out of relatively secure investments, such as bonds, securities such as equities, which offer more risk but also more returns. You want to invest? The experts from the Bernecker exchange-compass help you in your investment. (Partner offer), Free of charge, the recommendations of the Bernecker exchange-compass test! (Partner offer)

How Slimmon Nguyen therefore expected in the short term, a "volatile sideways trade". The volatility indices, which are also called the "fear barometer" of the stock exchanges to speak. The VDax-New is 38,51 points since mid-may, not more, and implies a range for the Dax of 1323 points in both directions in the next 30 days. Also, the US VIX volatility index is listed with 36 points as high as since the beginning of may, not more.

So, investors

In all of this is to protect investors must not forget that an exceptionally rapid Crash of the markets and an historically rapid recovery rally followed. So, the Dax has gained in the past week alone to the same three-way trade more than three percent is added. In mid-may, the leading index rose in only one day, all the 5.67 percent. With such Momentum, it is understandable that investors are already sufficient in the case of mini-signals of a trend reversal, your profit paint once and course increase the losses in order.

From its Low of the Dax price is in spite of yesterday's loss is still 47 per cent in the Plus. Who's got good Timing in the market, and a large part of this Zuwaches as a profit can be recorded, so there's still always the opportunity, the profits easy to pocket. Further opportunities for hedging the portfolio with a stop-rates or Hedging with Short-would be the instruments. However, such measures needles-always a part of the return. What papers are for, and what are the opportunities for investors remain, in addition, read at this point in more detail.

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Date Of Update: 12 June 2020, 15:27
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