Oz & USA not in Sync

Well there is no reason why they must be.

Despite all the headlines of a rising China and Russia as super powers – which have foundation - the USA is still the leading global financial power.
That is not to say that global markets look to the USA each day to see whether they should go up or down.
But if any market diverged too much, they would be quick to analyse why.

Now I am not talking of the longer term and what the economic power rankings might be in 15 years, but for now and still many years to come, the USA markets is where the action and volume is.

Let’s look at some charts – the Oz XJO and the USA mini Dow Jones:

The first aspect that hits us in the eye is that the Dow is in a wave four retreat – and it appears an orderly one at that. The XJO is not in retreat but rather is struggling along to new highs; with some drifting and sideways tracking along the way.

Maybe why one might look at leveraging into US markets with US options. Not now but perhaps after a pullback.

The beauty of US options is that they enable you to diversify and in fact spread risk and take positions in any market whether they are trending up or down or range trading.
They also enable you to hedge against a more conservative market like the Australian. Derivatives in the USA offer a very liquid and massive market offering untold opportunities.
They are generally short term plays whilst biding time in an otherwise tame and quiet market.