During the last week we started seeing some signs of distress in the Nasdaq, with some heavyweights beginning to show a little bit of weakness. Our strategists put up two posts on the current outlook on the Nasdaq on the International Outlook blog, which showed some key support levels being tested and broken. With those in mind we are slightly more cautious this week.
One of the things that we’ve been thinking about over the last few weeks is; the past. We find ourselves wondering how similar this current situation is to the one back in 2009/10. Could the monetary stimulus just refuel the rally and keep the market (first) and the world economy (second) pushing higher and harder? Possibly, yes.
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’.
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 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.
The trade war cycle turned negatively once more last week and with US GDP data due out on Wednesday this week, it may just become apparent how hard this trade war is biting. We cannot predict what the data is going to be like, although we think it is safe to assume that things are …
Now that the Moody’s news is out of the system and we can once again place our trust in the charts, there are some interesting opportunities brewing for the week ahead.