Anglo resumes dividend

We went short on the ALSI this morning and have closed half of the position for a tidy profit.

We'll let the other half of our position run, or if the market turns around again, execute our stop loss for a free trade.





Results this morning from Anglo American stating that net profit slumped 31%. A dividend of 0.25c or R1.83 was declared, but is lower than an expected dividend of R3.00.

The market reacted to this driving the price down almost 2% from yesterday's close of 29590.

The markets are awaiting news from the US with their GDP numbers out at 14:30 to give the market some direction. An figure of 2.6% growth is expected.

We are currently watching from the sidelines to see how the markets react to the GDP figure later this afternoon.

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Watching carefully from the sidelines

We closed all our directional short ALSI futures positions yesterday.

The market is in consolidation phase, ZARUSD 7,35, Gold 1165 and DOW down half a percent. We are sitting on the sidelines at the moment and looking for a down leg to the market. When the break occurs we will start to sell short with all stops at 2 x ATR. (one MUST always have a stop on ANY short position)

A bit more later during the morning.

ALSI trading lower

We've opened a short position on the ALSI at 25333 and we're keeping our stop close at 25330 making use of the free trade principle.

We'll continue with our free trade that we have at the moment, and will add to our position if the market continues in our favour.

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Markets steady, inching lower

The market has settled down and is consolidating at the moment, with the ALSI up 0.41% this morning.

Asian markets are also positive as well as the US Futures markets showing slight gains this morning.

The Dow hasn't shown any sign of slowing down its rally, but it's trading in overbought territory. The trend upwards is still intact, as well as on the JSE All Share.

We will keep an eye on news released today, core durable goods orders from the US at 14:30, but we expect the trend to continue.

Shares looking strong is Anglo's this morning up 1.57%, with interim results being reported on Friday. Old Mutual also showing gains of 1.64% today, continuing it's rally on rumours regarding a Nedbank buy out that's been circulating lately.

Buy on the rumour sell on the fact.

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JSE to open at 15:20

It looks like the connectivity problems have been sorted out and the market is planned to open in 5 minutes.

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JSE closed due to technical problem

The ALSI is up 174 points since the open this morning, but the JSE is closed due to a technical problem.

The overseas markets are positive this morning, with news coming out of the US later today at 16:00, SA time.

Expect shares to open higher to play catch up when the JSE reopens.

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Profit stopped out

We just got stopped out of our free trade on our ALSI position for 5 points profit at 25,365

After the market broke to the down side we moved our stop from 24,460 down to entry plus costs.

Why do we talk about a free trade so much?
* Well, when one takes a trading position (we like to trade with the trend) and the market moves in you favour, we like to use the "markets money" as our safety cushion. We will initially place a small amount of our own funds at risk but as soon as our trade develops into a profitable trade, we then move our stop loss to just above what we paid for the stock plus our costs. We put the order into our autotrader as to take the human element out of pulling the trigger and then sit and watch how the market and our trade develops.

When we catch a trend, it is usually very rewarding, The downside of our strategy and trading system is that one often get stopped out of your trades for small losses, so the losses does add up over time but by catching the big trend all those small losses are made up and then some more....

It is also important to take all your buy and sell signals from you trading system. The simple reason is if you allow yourself to select certain trades you are guaranteed to miss the break out and trend when it happens.

Our ALSI trade update

We got stopped out at 24,370 and turned the position around into a short (it was a 50 points loss - but luckily on a very small position)

We open micro ALSI position at 25,430

We opened a micro long position on the ALSI futures index at 25,430 according to our model. We are not too sure about the market direction and see this as a tester position. Our stop will be a break below the previous lows at 25,330

The market is much better than the rugby this morning

Our market is trading at around +130 at the moment, the ZAR is quite strong at 7.39 to the USD. And the EURUSD moving sideways at 1.2917. We are still looking to sell some of our weaker positions into strenght.

We like to stick to the stocks that are busy moving up the "performance ladder" over a 3 month time period, these are the stocks that tend to outperform.

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