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Riding the Bull

U.S. businesses are in a definite bull market right now, meaning that the overall trend for stocks is decidedly upward. And according to many finance professionals, this is still in the beginning stages. Since mid-2009, stocks have been creeping upward. On Monday, the S&P 500 closed above 2,000 points for the first time ever, highlighting this fact. Some experts think that this could go on for as long as another 15 years, which means that jumping into the markets now might still be a good idea, even though many indices are at record high prices. Just because they’re there now does not mean they are ready to come back down.

There are some issues with this theory, of course. Businesses are doing well, but the average American is not. There is a distinct dichotomy between these two things, and whether or not it can continue is debateable. Can businesses keep increasing in price if the average consumer cannot keep participating in the businesses themselves?

Unfortunately, there’s not an easy answer to this question. Most valuations right now are not overpriced, and that usually translates into room for higher prices. And it probably will in this instance. So, yes, prices look like they will keep rising overall for the foreseeable future. For short term traders, this is a good thing, especially for binary options traders that can control the timeframe that they are looking at when it comes to keeping their money in the markets.
Bull Market Run
The current 200 day average of the S&P is 1875, and it has traded above that number for over a year now, confirming the bull market. Most analysts will not declare a bear market until the 200 day average is higher than the current price, and when the actual price is 6 percent higher than the average, that is a long ways off. But the number will not stay at 1875 since it is a moving average. While prices keep going up, the average will keep going up, too. And when prices start to move sideways, the average will still keep going up as it is a lagging indicator. The higher prices go, the closer the index gets to starting to lose steam, and this means that a stalling of momentum is getting closer. It’s impossible to say when it will happen, but basic economic theory says that movement comes in cycles, and it’s only a matter of time before a downtrend occurs.

This is all a long winded way of saying that a 20 year bull market is possible, but extremely unlikely given the economic state of the U.S. right now as a whole. Things like the status of the dollar also need to be considered since the dollar and major indices usually run counter of each other. But right now, they have a positive correlation, something that hasn’t happened since 2008–right before the housing market crashed, dragging stock prices down with it. These two aren’t necessarily linked, but it is a dangerous precedent.

In other words, a short term strategy seems much more prudent right now than a long term, and binary options make this accessible to more traders than ever before. Yes, a day trader in the traditional sense can make a lot of money given the right circumstances, but the average person doesn’t have the means to make that possible, while binary options trading gives this ability to a huge number of people. Not only does it create big profits quickly, but it also gives you an easy out when the markets do eventually change. And since there’s no way to know exactly when this will be, that’s a good thing.
Risk Disclaimer