The end of the year nears, and it seems like Santa might not come this year. Historically, December is one of the strongest months on the calendar, but we think this year might be a little different.

Offshore trade ideas (bigger picture)

S&P 500 (SPY)

The upper resistance looms, and the market feels like it is running out of a bit of steam. There are now also multiple counts of bearish divergence on this chart, so we are comfortable with our targets lower down. There might be some fight left in this bear market rally yet… but not much in our view. Santa might not come this year.

U.S. Dollar Index (DXY)

Is that the end of the correction on DXY? It looks like it is trying to put in a bottom and get back on the ‘strengthening’ train. It is perhaps important to stress that the support level between 103 and 104 is a very important level that has proven to be significant over a few decades. Thus, we still do think that there is a chance the market might want to go test that support. Should it turn here and not get much closer to support as what it did last week, it seems that new highs on DXY might soon be on the cards.

USDZAR

USDZAR is still on a bit of a make-or-break level here as it thoroughly tests the tertiary trend support. There is some bullish divergence between the stochastic oscillator and price at this point as well. Our thinking is that we see a strong upward push from DXY paired with a solid bounce from the USDZAR. In other words, we aim higher, to a weaker Rand.

S&P 500 Volatility Index (VIX)

This might be a good time to remind you that you need to buy protection when you can, not when you need it. With some luck we could have another week of mildly stronger markets as the SPY tests its down trend line, and the VIX tick down into that 18 to 22 region. This would make a good buying opportunity for VIX calls, striking at 30 with about 6 months to expiry. Santa might not come this year and if he doesn’t, you’re going to wish you had coal (lol, poor Europe) and VIX calls.

Brent Crude Oil

$86 is a very, very important level at this point. The long trade off this level, in our view, is probably a high risk-reward setup that is worth trading. That said, given the overall macroeconomic condition of the world, oil demand is under pressure. We’ve mentioned before that we are stubbornly holding onto our views, but unless oil can hold this level and start to push higher soon, we might have to relook and reconsider our position. For now, we think this is an easy long, but we have to remain flexible and open to the idea that perhaps the party is over. Time will tell.

Deutsche Boerse DAX Index (DAX)

Speaking of Europe, the DAX looks, well, difficult to read. Given our overall view of global markets, we think that it could be a sell (short) around 14800 (if it gets that high). We note some bearish divergence as well. Maybe it has just pushed a little too much too soon? Santa might not come this year and this chart is looking like it will be very disappointed if he does not.

South African trade ideas

JSE Top 40 Index (ALSI)

Well, there weren’t any moves over 4% last week, so we suppose that’s a good thing. The time has come to clear the annotations from this chart and look at it with a fresh perspective. Despite the bearishness in the macro and offshore environment, we are actually rather bullish on the local market. We are seeing more and more bullish setups and also believe that Emerging Markets will outperform the Developed Markets over the next few years. This could be driven by a shift from ‘growth’ to ‘value’ and a mad scramble for commodities and resources. South Africa, believe it or not, is well placed for that type of scenario. There is also a slight backwind of ratings agencies starting to give us the thumbs up again. It’s a confusing time to be honest, and even though Santa might not come this year, we do think that we should not overlook the buying opportunities that will create in our own market. We have been ‘relatively’ stronger, well, perhaps not in USD terms, but there is a great amount of value to be found in our market and being too bearish ‘locals’ might prove unwise.

Anheuser-Busch Inbev (ANH)

And just to cleanse the pallet, we present the short that is not working… Ta-daa! ANH. We may still see this work now that momentum is starting to roll over and it has not really managed to push out of the resistance zone, but we are open to stopping out and running for the hills (again) if it keeps pushing higher.

The Foschini Group (TFG)

This is a weekly chart on TFG, showing a break of support and building downside momentum. Do we see it trade back to the R60 region? Since Santa might not come this year, how many people are going to be lining up for Black Friday specials this coming weekend? Are festive season retail sales going to be strong enough to turn this entire boat around? We think not many, and no.

Sun International (SUI)

Alright, ok, time for some good news. Santa might not be coming, but local tourism surely is. Again, we look at a weekly chart, this time of SUI. We note the flat top triangle breaking to the upside and a continued post-covid recovery in the sector. Remember we’d mentioned that there is much value to be had in South Africa? Well, this is one of those undervalued and overlooked stocks (and sectors) in our view.

ABSA Bank Group (ABG)

Our local banks might be a good place to look for value as well, and ABG has broken a large range and managed to hold above the upper range extreme for some time now. We take this as bullish and think that a long trade here is rather safe.

Joining HCA trading

Come find out why we ranked as number one for traditional investors in South Africa. 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 instrument	Brokerage rate	Margin rate	Minimum trade charge
JSE listed equities and ETFs	0.30%	100%	R150
CFDs on JSE listed equities	0.20%	10% – 25%	R50
SAFEX listed index futures (ALSI)	R20	6% – 8%	R20 per contract

Offshore stockbroking rates

Trading instrument	Brokerage rate	Margin rate	Minimum trade charge
U.S. listed equities and ETFs	USD 1 cents per share	100%	USD 2
Canada listed equities and ETFs	CAD 2 cents per share	100%	CAD 2
U.K. listed equities and ETFs	GBP 12 + 0.1%	100%	GBP 12
Germany listed equities and ETFs	0.20%	100%	EUR 8
Forex	0.40%	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.