Profiting from Market Panic

By www.ProfitableTradingTips.com

http://profitabletradingtips.com/profitable-trading-tips/profiting-from-market-panic
The New York Times reports that oil’s
fall continues to less than fifty dollars
a barrel. Panic seems to be affecting
markets.

oil prices tumbled below $50 a barrel on
monday, spooking global financial
markets and signaling that the
remarkable 50 percent price drop since
june was continuing this year and even
quickening.

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the new drop in american and global
benchmarks of more than 4 percent was
accompanied by a series of reports of
increased middle eastern oil exports

continuing increases in american
production despite planned exploration
cutbacks by many oil companies

and renewed worries about the declining
economic fortunes of europe.

Uncertainty when extremes beget panic
is common and profiting from market
panic is the business of an astute trader.

Where is oil going next? Will Europe
slide back into recession?

Will the Euro Zone break up with the
exit of Greece over debt issues?

How long will the recession last in
Japan?

And, how badly will an industrial
decline in China affect raw material
suppliers in the developing world?

There are a lot of concerns in the
markets and several means of profiting
from market panic.

Panic in the Energy Sector

The Dow Jones Industrial Average has
fallen by 500 points in the last few days.

The US economy is growing at an
annualized five percent but oil and gas
stocks are hurting as the price of crude
has fallen by more than half in the last
six months.

RT remarks on how the Dow Jones
Industrial Average lost 300 points in a
day due to the rout in oil prices.

the dow jones industrial average has
lost over 300 points as the us crude oil
prices briefly dipped below $50 per
barrel thrashing energy stocks on
monday.

This situation requires application of
both fundamental and technical
analysis.

There is certainly too much oil and
natural gas chasing too few buyers as
(outside of the USA) economies cool
across the world.

There is also panic, and profiting from
market panic requires not only a solid
knowledge of fundamentals but also an
eye on technical analysis signals as
fear and greed drive prices above and
below what fundamentals dictate.

Buying or Selling Chinese Stocks

The Shanghai stock exchange is at a five
year high and continues to go up at the
start of 2015.

The fundamentals here are that the
Chinese real estate bubble is starting to
deflate and investors are pulling money
out of real estate and putting it into the
stock market.

The Wall Street Journal notes the rally
in Chinese stocks.

They also note that the Hong Kong
exchange is being much more skeptical
than the one in Shanghai.

stocks in china started the year with a
bang monday, with shanghai ending at
a more than five-year high and china’s
commodity sector defying a further
tumble in global oil prices.

enthusiasm toward chinese stocks in
hong kong continued to be more muted,
as institutional investors dominating
the market were more wary of signs of
chinese economic weakness. the hang
seng index lost 0.6%.

More and more investors are signing up
for accounts in Shanghai.

When there are no new investors
clamoring for stocks the pyramid may
start to crumble.

At the point there may well be
opportunity for profiting from market
panic both with short selling on the
way down and selective purchases as
the market bottoms out.

Profiting from Market Panic

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