The events of the last week have been nothing short of horrific. But once again, we have shown that the South African spirit cannot be broken! People of all kinds have rallied to not only protect their communities and loved ones, but also to rebuild, repair and bring support to those most severely impacted by the attempted insurrection. Our ability to indiscriminately band together in the face of adversity is perhaps our nation’s greatest strength. And to that end, I want to use this week’s post to encourage you to support KZN this Mandela Day.
Weekly game plan
The last two weeks have been tough. In all honesty, the reason this blog post is only being posted now is because I found it difficult to not express an opinion on the current happenings in our country. It is deeply concerning. I must have written and rewritten this first paragraph at least ten times. It just feels disingenuous to write up a blog post that optimistically looks for opportunities, while our cities are burning. So with a heavy heart, I have to force myself to clear my mind of the anxiety and noise and focus on the charts.
We have to admit that today’s post was difficult to write. It is hard to focus on opportunities in the week ahead while our country appears to be… well, having a really rough time. We often say that we must filter out the noise and focus only on those things that can accurately analyse (aka. the chart), so that is exactly what we are going to do. Besides, the world’s financial markets are looking fairly good and we’ve positioned well for strength in the offshore portfolio’s. The only thing to do now really is to be patient and hold our positions.
We are all guilty of overcomplicating trading. Often we have to remind ourselves that most of the work is done by the market and that trend following is often the easiest way to interact with markets. This week we look at a few of the better trend following ideas we have for the week ahead.
The second half of last week got really wild, really fast. Given the fact that hardly anything has changed – in the sense that there are no interest rate hikes on the table for at least another year and a half, and that the FED will continue to buy $120bn worth of bonds every month – we think that the market might have had a bit of a strong ‘knee-jerk’ reaction to the FOMC minutes. Thus, we say buy the dip. As long as the free money keeps flowing, it will be difficult for the market to sustain downside.
Sometimes we just need to be patient and follow the trend. We often get so caught up in the short-term news flow and happenings of the market that we lose focus of the bigger picture. Right now markets are trending higher, so our job is simply to look for opportunities to get on the bus.
It’s an age old saying in the market, and for good reason. The trend is your friend. Often we try to fight it and mostly, it wins the day. Markets are currently trending higher, and thus our plan is to find opportunities to get onboard with the trend and allow it to make the returns for us.
Once again we’re doing things a little differently this week, just because we can really. So instead of giving some broader market trade ideas as we usually do, we’d thought that we would do a CFD account update and share the current open CFD trades in our managed CFD accounts.
Our view has been that one should treat cryptocurrencies much like you would treat any normal individual stock in your portfolio. With the recent rout in cryptocurrencies, we think that it’s time to buy bitcoin. There are many loud voices out there right now (let’s call them paper hands) that are ranting on about how bitcoin is dead… ignore them. Treat it like a normal stock, don’t take massive (or geared) exposure and don’t bother about the opinions of the paper hands. It’s time to buy bitcoin.
Well then, alright. This week we’re doing things a little differently. @TraderPetri asked twitter what they wanted us to have a look at and we’ve obliged. In no particular order, here are the twitter chart requests for the week ahead.