The market and short ZAR

I feel that we are seeing so much good news and the market just does not respond to this going up more, this is always worrysome so I am really keeping an sharp eye on the short term news flow for now.

We just took a very short ZAR vs USD position at 6.75, it seems like the USD wants to strengthen a bit after the recent sell-off. We will be looking to sell this position at around 6.85 to 6.92.

It's Easter weekend and time to close some long positions, why pay interest on geared positions for 4 days and run event risk as well. The markets closed for 4 days is a long time in a trader's life.

Enjoy your Easter and drive safe!
Pierre

Close of ZARUSD trade

We have just closed our long position on the ZAR vs USD at R6.85, locking in a 2% profit.

A few months ago the correlation between the markets and the EURUSD exchange rate was fairly strong, but in recent weeks it looks like it has broken down since the markets have pulled back while the Euro continued to strengthen against the greenback.

Safe trading

Possible triple top formation on the EURUSD

A Triple Top is a pattern very similar to the Double Top -- only there are three distinctive tops rather than two. A triple top formation is a distinct chart pattern characterized by a rally to a new high followed by a moderate pullback and a second rally to test the new high. As the stock rallies to make the second peak (top) sellers overwhelm buyers and the stock price falters again This process is repeated a third time but buyers finally submit, support levels are broken and a massive decline ensues. - http://chart-patterns.netfirms.com/tripletop.htm

Markets looking to run out of steam

The past 3 days the markets have been pulling back a little bit.

When studying these two graphs, the top one is the JSE ALSI Future and the bottom one the Dow Jones Industrial Future, the moving averages have crossed and it looks like the market is losing momentum.

Also looking at our big counters like SASOL, ANGLO and BILLITON the pictures is basically the same, since they make up about 35% of the ALSI Future due to their size in relation to the market.

PPI and unemployment claims are released at 14:30 out of the US and it looks like the economic news is also on the weaker side.

To play it safe I would take profit on my trades if you haven't yet. To go short in this market is a totally different question altogether.

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A pullback on the cards?

As per my previous post, the market went and tested the previous level around 29900. It tested it again yesterday but couldn't break through and pulled back around 400 points this morning.

We think that the market will pull back a little before it goes up again. Taking profit around current levels could be a good idea. It looks like the market is losing momentum and will test the 200 day moving average again.

Volatility will start to pick up as we kick off the earnings season in the USA with Alcoa reporting not such great figures last night.

I think we could test 29000 on the ALSI quite soon.

Safe trading