Brief thoughts

A busy schedule for us on this side, sto this week we offer only some brief thoughts and a handful of offshore trading ideas.

Offshore trade ideas
S&P 500 (SPY)

Last week we were looking for a bit of a pullback on the major U.S. indices. The pullback came around for a few days, although was very short lived. Friday’s session was nice and strong once more. At this stage, we’re not really sure how to call it. On the weekly chart (left) it looks as if SPY is in a bit of a resistance zone near the upper end of a large rising wedge. On the daily chart, however, it looks like the small correction in the first half of last week has set SPY up for another push into fresh all-time high territory. That said, from a momentum perspective we are still seeing some emerging sell signals. Therefore, for now, we remain somewhat bearish SPY and will avoid entering new long trades on this market (instrument).

Russell 2000 (IWM)

In stark contrast to the SPY above, we really like the IWM setup for a long trade. IWM broke out of an almost 12 month consolidation and has come back to test the break out very nicely. Perhaps there is still room for it to test the $234.60 level before seeing further upside, but either way we are happy to be long here.

Philadelphia Semiconductor Index (SOX)

SOZ has been a bit of a market leader in the past and we believe that it still very much is. After a sharp sell-off in the first half of last week, it managed to put in a strong end. Right now there is no high probability setup for us to trade here, so we cannot initiate and new trades. For those who bought the break out though; moving your stop loss to the Wednesday lows would be a nice way to ratchet your stop higher and allowing a winner to run.

Invesco China Technology ETF (CQQQ)

We mentioned CQQQ some time back as a potential buy and reiterate that today. Using a weekly chart we illustrate the significance of the support level it managed to hold. We also note that Chinese equities are still underweight in most asset managers’ portfolios. Once policy starts to become a bit more favourable in China again (which is starting to happen – look at Chinese education stocks and recent policy changes in that space), we think that institutional funds will start to flow into Chinese tech once more and CQQQ should put in a decent rally over the next 3 to 6 months.

Gold

Weekly chart on gold here showing that triangle formation we’ve been eyeing has finally broken. As the market is coming to terms with the realities of inflation, gold could really catch a bid.

U.S. Dollar Index (DXY)

The mighty Dollar broker higher and out of the range it’s been in for a couple of months. Although nothing moves in straight lines, we expect that we will continue to see a stronger Dollar for another few months at least. We can now comfortably say that the DXY trend is up.

USDZAR

Unfortunately a stronger DXY means a weaker ZAR. At present the USDZAR settled inside the range, although we think the most likely move from here is towards R16.00. Also note that from a trend perspective, we can say that the trend here has changed too.

Joining HCA trading

HCA trading offers a number of different trading accounts to suit different types of traders. Our offshore trading accounts allow traders to buy shares, ETFs, CFDs and even fractional shares in the United States for only $2 a trade. Locally, we offer shares, ETFs and CFDs at good rates with robust and reliable trading platforms. All our trading, including CFDs, is done on a Direct Market Access basis and thus our clients are able to interact directly with the real equity market and not have to worry about excessive counterparty or liquidity risk. Our prime broker locally is a big four bank and offshore we make use of one of the largest non-bank prime brokers in the world.

Local stockbroking rates
Trading instrumentBrokerage rateMargin rateMinimum trade charge
JSE listed equities and ETFs0.30%100%R150
CFDs on JSE listed equities0.20%10% – 25%R50
SAFEX listed index futures (ALSI)R206% – 8%R20 per contract
Offshore stockbroking rates
Trading instrumentBrokerage rateMargin rateMinimum trade charge
U.S. listed equities and ETFsUSD 1 cents per share100%USD 2
Canada listed equities and ETFsCAD 2 cents per share100%CAD 2
U.K. listed equities and ETFsGBP 12 + 0.1%100%GBP 12
Germany listed equities and ETFs0.20%100%EUR 8
Forex0.40%100%USD 4
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*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.

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Every week needs a new plan!

Markets change all the time. New fundamental drivers emerge, technical setups mature or fail and our trading plan must adjust in order to keep up with the ever changing environment. Every week we highlight some of the trade ideas that are generated within our client community so that you can stay on top of what we're looking out for and planning to trade at the beginning of each week. 

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