Trying to get a feel for a whole year of what the financial markets will be doing an be overwhelming, but the end of 2015 can give us an idea of what will happen in 2016, at least in part. Experts believe that the beginning of 2016 will be dominated by one of the biggest sectors–the financial sector. Because of the way that the Federal Reserve has structured their interest rate hike, the financial sector is geared up to benefit the most from it.

In 2015, the financial sector was routinely one of the most stable areas of the market. While this in itself is not an indicator of whether you should go long or short on a position, you can get a feel for efficiency in pricing. If you look at price to earnings numbers, you will see that the S&P 500 as a whole has a rating of 16.5. That means that for every $1 in earnings, the price of these 500 companies is $16.50. A sustainable number right now is considered to be 20 and below, with companies that go up to 25.0 still be considered somewhat safe. The financial sector has a rating of 13.7. Some believe that this is a hint that the financial sector is actually undervalued right now, and that means that the Fed’s move could spike prices upward.

Of the ten major sectors in the S&P, the financials account for about 16.6 percent of the benchmark, giving them a lot more pull than other sectors have. If the financial sector does take off like it is expected to in 2016, now is a good time to establish longer term positions, and it will certainly dictate how you should approach your short term trades, too. For now, it seems that we need to just approach the next week cautiously, and be prepared to act if these predictions begin to show signs of accuracy. It’s also key to watch what crude oil does during this time. Oil is up off of its low point for the year right now, but if this support should fail to hold, there’s a good chance that another drop in crude would have an adverse affect on the financial sector, too. Again, there’s only one way to find out what will happen, and that involves just waiting.

Short term traders often find that the last week of the calendar year is unpredictable. Money managers make surprising moves as they try to make their portfolios look better for the end of the year, and this can create big problems for those that are focused on trying to make small, yet predictable gains in their own trades. This can be especially disruptive to binary options traders that put their emphasis on ultra short term trades like 60 second options, or even 5 minute trades. During time like this, relying on technical indicators alone can be problematic, and sentimentality can take over as traders begin using their emotions, rather than what the numbers dictate, as they make their decisions.

Traders that like to focus on longer term trades can find a huge opportunity when things like this happen. If you find that a favorite asset of yours is suddenly undervalued, taking out a longer term trade can be worthwhile. There are many binary brokers that allow 30 day expiries or longer, and this can be a good time of the year to capitalize on those. When emotions run high like they do right after Christmas and before the New Year, mistakes are made, and there’s no reason why you cannot profit off of them.