We’re experimenting with something different this week. Let us know what you think!
The ‘tech call option whale’ that’s been doing a lot of this buying has now been identified as SoftBank. We also had news that Tesla will not be included in the S&P500 index. Perhaps the Nasdaq melt-up might have finally come to an end?
There does not seem to be too many good setups around at this stage, and the only relatively attractive setups are slightly longer-term in nature. That is, on a swing trading basis were trades are taken for a number of weeks, rather than just a few days or hours. A catalyst might come in the form of Trump signing an executive order to provide further coronavirus relief directly to US households.
The world is mostly mad, but luckily our views and beliefs about the world around us has little to do with what is actually happening, and the key to moving forward is to respond appropriately to the external environment, regardless of whatever it is that we might believe. Our job as traders is now and has always been to simply follow the market. Therefore we look mostly at technical analysis again this week so that we stay unbiased.
This week we are looking at a few local charts from a technical perspective only. Sometimes we get a little caught up in the noise that comes with consuming news around the market. Thus, sometimes it is helpful to just block out all the noise and just look at the charts. The mantra we often have to repeat to ourselves as traders is ‘allow the market to lead’.
It is sometimes difficult to remain objective when it comes to market analysis. The more we look at charts, the more bearish we become. This might not be the right outlook as it could just be various forms of biases that we are unable to overcome. The primary objective of any investor or trader is to remain objective and see things for what they are, not as what we would like for them to be.
COVID-19 is wreaking havoc in first world countries, while surprisingly South Africa seems to be coping with it much better than most. The lockdown extension might have broken the hearts of many South Africans, but we know that it has saved the lives of countless numbers of our kin. Besides, sitting at home and focusing …
We’ve had continued issues around Load Shedding and various other economic ailments, and thus our Rand has weakened somewhat. This weaker Rand narrative is what we think is likely to drive our market in the coming week.
Over the weekend we saw some positive news flow around the trade war between the U.S. and China. We saw some positive comments on Thursday and Friday last week as well, which led to a rather strong recovery in global equity markets.
A little late due to some administrative changes, although we decided that we should publish some of the trades we are watching this week anyway.