The U.S. market is closed on Monday for Presidents’ Day, which means that our market will likely be rather quiet at the start of the week. Overall though, the bullish trend is strong and has been for some time. I rang some alarm bells last week, although it seems that I was wrong. This doesn’t mean that we should all rush out and put on a thousand new long positions. Patience, caution, always.
This week I am keeping things a little less ‘opinion’ and focusing just on technical trade ideas. Well, trying to keep opinion out of it at least and just following what the chart says. So let’s get into it.
It just feels like the entire world is actively choosing to not believe that anything really bad is happening there. We’ve put a lot of thought into what our view needs to be on this topic and it is our feeling that we would rather be “the boy who cried wolf”, and thus make a few errors in an attempt to be extra-careful, before we join the rest of the crowd and just pretend that nothing is wrong.
The news this past weekend has been dominated by the Coronavirus. It seems that the rate of infection is accelerating and that it is managing to reach other countries, with both Japan and Australia confirming cases of infection. Markets might react poorly.
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.
Welcome back load shedding. And also welcome back war in the Middle East. The combined impact of these two factors will likely make it a very difficult week for the Rand.
So the trade deal is all but done. Overall, should bullish sentiment remain the theme for the week, it very likely that the Rand strengthens and even that emerging markets outperform developed markets for some time to come.
So this week is a little weird. There are some bullish looking setups emerging on some of the banks, although they are in the middle of nowhere in terms of large trading ranges.