Building on some of the thoughts we shared in our blog post last week (U.S. commentary), we want to start off the weekly game plan by urging caution. We need to remain ‘trend followers’ and keep dancing while the music is playing, but we must acknowledge the possibility that the carpet can be swept out from under us at any minute. Most importantly, we need to be ready to jump when the carpet is pulled so that we don’t fall flat on our faces… but also not spend the entire party just jumping up and down in the middle of where everyone else is trying to have a good time. It is best then to keep a flexible ‘everything is temporary’ mindset, and be open and ready to change our views when presented with evidence contrary to what we might think we know.
Well, well, well, trends do persist. We are seeing some of the setups from last week starting to work. We also have a copy of the phase one trade deal for download.
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.