Sometimes markets can be fairly boring. Well, that very much depends on where you look, but if you are looking at the major indices now, things seem fairly boring to be honest. The market keeps grinding higher on better and better looking market fundamentals. Sure at some point the tapering will start and we’ll all suddenly wake up and realise that inflation was not transitory afterall…
Until then, there is not really too much to do from an index investing and trading perspective. We do think that there are some fairly massive opportunities in selected Asian markets and energy, but those are secrets we’re going to keep for our clients.
Offshore trade ideas
S&P 500 (SPY)
Nothing really to see here. The trend is still intact and there is no signal to spur us into action.
Russell 2000 (IWM)
One range to rule them all…
No real change here, and thus no trading signal. We do note the bearish divergence between both oscillators and price. Will it be enough to break IWM out of the bottom of this range though?
U.S. Dollar Index (DXY)
$93.50 was tested and rejected. It seems now that the downside momentum is fading a little. There is a lot of Chinese data expected out next week, so making any short-term call here would likely be somewhat unwise. We suspect that DXY should stay under the $93 level (which is good for commodities) until there is a big enough catalyst (aka. shock event) to chase the fund managers back into ‘safety’.
Gold
Weekly gold chart update. Nothing really to add from previous weeks observations, but so far so good.
Platinum
Platinum has been under some pressure during the last few months. We note the bounce off an important support level. The next test for Platinum is going to be the tertiary (down)trend line [marked in white]. Ironically, this coincides with the 50 day moving average. A convincing break through resistance could serve as a good buy signal.
South African trade ideas
JSE Top 40 Index (ALSI)
The ALSI is still stuck in the range. No signal to act at this stage.
Clicks Group (CLS)
Perhaps time to bank some of those CFD longs on CLS? Looks like a fairly decent shooting star / inverse hammer candle formation, along with sell signals on both the oscillators.
Capitec (CPI)
Oops, a few sell signals triggering on the wonder bank stock here. Perhaps a pullback to R1700?
Dis-Chem Pharmacies (DCP)
Is this a fake out, or is this the start of a move back to the 200 day moving average?
Exxaro Resources (EXX)
This is a very constructive looking setup on EXX. The longer-term trend appears to be turning up again and price is about to break to a new recent high. With some ‘reflation’ as a backwind, EXX can do well into the last phase of the year.
Sanlam Limited (SLM)
Oh my word, these ranges… SLM has been going nowhere slowly for almost a year now and by the look of things, more of the same is the most likely outcome.
Want ideas, insights and research?
*Please note that these trade ideas form part of a larger weekly plan and the value of financial products can increase as well as decrease over time, depending on the value of the underlying securities and market conditions. The risk of loss arising from trading in Contracts for Difference can be substantial. You should carefully consider whether such investments are suitable for you in the light of your circumstances and financial resources.
