Time to buy the S&P 500 Dip Post-Crash? What is the Carry Trade? Trading Long on the DAX.

In today’s GCI Market Outlook, let’s take a look at Forex Trading on Silver (XAGUSD), USDJPY, the DAX(DE40), the Dow Jones Industrial Average, and the S&P 500.

People have been asking what caused the recent crash on the US Stock Markets.

The big blame for the sell-off was the unwinding of the JPY carry trade that started about 17 years ago.

Basically, at crazy-low interest rates, investors could borrow JPY, and convert it to any other currency like USD.

You could then lend out or invest that money at a profit. Simple.

If your research tells you that this panic is over, you could open a buy position on the S&P 500 where we see a long uptrend and some technical bullish signals.

Also, similarly, price action on the Dow Jones Industrial Average has hit the lower trend line with the stochastic oscillator looking oversold.

Some analysts don’t think the unwinding of the Carry Trade is over but the BoJ, just this morning that they won’t be raising interest rates while the markets are unstable.

This has caused JPY to weaken and we will look for reversal opportunities.

Speaking of indices, we are also watching the DAX 40 as another gap trading opportunity.

And, we hope you were paying attention last time as our short opportunity on silver worked out and is still continuing.

That’s all for now.

CFDs and FX are leveraged products and your capital may be at risk.