CPI

The bull is strong yet!

We saw some fear and panic… for about a whole week. Well, in truth, the institutional money didn’t even flinch. The market bounced hard. The Evergrande situation unfolding in China is still rather risky, although it seems that the CCP are doing a rather good job at a ‘controlled demolition’. They might be making an example of Evergrande in an effort to cool off property speculation in general. There have also been some large repurchase agreement (repo) activity over the weekend, which is indicative of monetary stimulus measures to prevent contagion into other sectors. For now it seems, with some help from central banks (as usual), that the bull is strong yet!

Nothing to see here

Sometimes markets can be fairly boring. Well, that very much depends on where you look, but if you are looking at the major indices now, things seem fairly boring to be honest. The market keeps grinding higher on better and better looking market fundamentals. Sure at some point the tapering will start and we’ll all suddenly wake up and realise that inflation was not transitory afterall…

Trend following for the win!

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.

Can’t stop a good thing

Well then, that’ll teach us to think that markets can actually come down from time time! Jokes aside, the bearish setups from last week have all be nullified and a fresh set of breakouts have taken place. Guess when it comes to equity market rallies, you really can’t stop a good thing. We’re not entirely convinced from a long-term perspective, but for the short-term traders… well, the job is to follow the market. So if you can’t stop a good thing, you might as well join in the fun.

Patience is key to opportunism

We’ve said a few time in the past that patience is key. The main benefit of being patient when it comes to trading is that we can wait for the really good setups to mature and then take trades in which the odds are firmly skewed in our favour. Some of the stocks we’ve been watching for a long time have finally triggered buy signals.

No pullbacks, only new highs please

Markets bounced hard in the second half of last week. It’s almost hard to believe how fast things are changing in the current landscape. Although there are so very many reasons to be cautious, if not flat out bearish, the market is just pulling its ears back and making its way higher despite the conditions of the world around it. Thus, given the strong footing the market ended on last week, and of course the charts, we think that we’ll likely see new highs in the week ahead.

Opportunities in Gold miners

Last week, after a strong start to the week, we saw the moves fade and the rest of the week resolve in directionless action on the major indices. Locally our banks popped well, although started pulling back a little in the second half of the week. For the coming week, we see opportunities in Gold miners for high risk-reward long positions at the start of the week. With some luck we’ll see decent pullbacks in the banks for good long setups in the second half of the week.

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