Another week of painfully low volume markets locally, and nothing but a slow sideways grind in the offshore world. This current environment continues to reinforce our bearish view. Markets are feeling a little like they are about to test some key support levels as the current short-term bullish trends have broken. Let’s look at some charts and get a feel for what to expect next week.
Bigger picture (Offshore trade ideas)
S&P 500 (SPY)
We’ve not drawn in the lateral support line here, but the SPY chart shows that the recent short-term bullish trends have broken. Momentum wise, it is starting to wane as well as the stochastic oscillator is about to dip below 50. For now, we think that is is very likely to see SPY move toward $385 as it tests the longer-term trend reversal. So, in essence, we are more bearish that our logo for at least a week or two from here.
Nasdaq (QQQ)
Looking at QQQ we see much the same as above with SPY, although here we have added in the lateral support line to show it’s significance. There are two ways to play this, the more risky way would be to already be short as the upward sloping trendline has broken, an the more conservative way is to wait for that yellow support line to break before entering the short. The same applies for SPY above.
Brent Crude Oil
Oil is still trading in the channel we pointed out last week. Until we have a clear break from this channel, we don’t plan to make any changes to our positioning.
Gold
A hit of hopium here for the gold bulls. Friday saw a decent reversal and the stochastic is starting to look like it wants to break higher. Perhaps if we see headline indices (as shown above) break down materially, we will see this gold price bounce and pust for $2000? For now we can’t tell, but keep it on the watchlist. Riskier traders can take a high-probability long trade from here (meaning a great risk-reward setup).
U.S. Dollar Index (DXY)
DXY needs to hold above 103.70 in order to keep the pressure on emerging market currencies.
USDZAR
Got Dollars? This chart makes us a little sad to be honest. As things are right now, we see now reason for this current trend to change.
Bitcoin (BTC)
Alright, so finally some good news. BTC is looking well on track with its four-year cycle and seems to be making a run for that 126 week moving average. It needs to get and hold above in order to start a new bull run. Remember though, this is a four-year cycle, so being near the beginning of year 3 of the cycle now, the best we can hope for over the next 18 or so months is a move back to the all-time high region. Only near the end of 2024 will it be time to sell again. Those that bought in November last year when we said Buy Bitcoin are up 50% already. Hang on in there guys, we have another year and a bit to go before we can sell again.
Ethereum (ETH)
We don’t have too many comments here, but things are looking a little better for ETH in our view as well.
Moscow Exchange (MOEX)
Weekly chart here on MOEX. Not the most bullish of candles last week, but overall this market is starting to look like it will recover. Worth having some exposure in our view.
S&P 500 Volatility Index (VIX)
We’ve not shown it here, but hedge funds are starting to load up on the VIX calls. So we will reiterate last weeks call and say again that buying some longer dated VIX calls (3 to 6 months out) is very likely a very good trade now.
South African trade ideas
JSE Top 40 Index (ALSI)
Ok ALSI, it’s make or break time buddy. Short-term bullish trends have broken… well, very almost on ALSI. Let’s see how Monday goes.
Naspers (NPN)
Ol’ NPN is still trading in its range. Watch for the breakout of this range. We think it will be lower and we think it will be rather explosive.
Reinet Investments (RNI)
RNI is also in a range. This one looks bullish to us, but we are open to following this trade in whichever direction it decides to go. A bit of a global equities sell off to fuel to ZAR weakness could work out well for ol’ RNI over here.
Shoprite Holdings (SHP)
Our SHP long idea from last week has not worked. Time to get out if you are not out already.
Sanlam Limited (SLM)
Nice little setup here on SLM that give two trade options, depending on which line breaks first. We think it breaks lower.
Sibanye-Stillwater (SSW)
It’s not looking good SSW. R32 is calling.
Thungela Resources (TGA)
It’s not looking so good for TGA either to be honest. R180 might be a good level to buy from, but until then, be patient.
AngloGold Ashanti (ANG)
Ouch! Is it over though? Who knows at this point? If the wheels fall off the global equities bus, maybe…
Anglo American PLC (AGL)
Short-term bullish trends have broken on AGL too. It’s not looking good.
Discovery (DSY)
Bullish break on DSY. At least some good news in a rough market.
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.