Are you quaking in your boots?

The recent natural disaster in Japan was the catalyst for the correction that was due.

It created a nice opportunity to buy stock at more reasonable levels. It looks like the relief rally is over and volatility is more subdued for the moment.

We are still in a strong bull market and we expect the market to test the highs again.

There are rumours of Portugal needing a bailout thus igniting the embers of the European debt crisis again.

We'll probably see some volatility which will create enough trading opportunities. So don't use too much leverage since opportunities will be aplenty.

Safe trading

NAV on Reinet

The NAV of Reinet is R14,11, and the Spot price is R11.09, a simple calculation tell us that the discount is 25.5% and that should Reinet unbundle all their BATS (British American Tobacco) shares to shareholders and one sell these shares in the market one would receive R11,40 per Reinet share, and the rest of Reinet is for free.

Reinets total assets are R27,272,028,032 with 1,959,412,860 shares outstanding.

We trade Reinet (buy at R11 to R11,10 and sell at R11,60 to R11,80)

New highs

Oil is currently trading above $100 per barrel. The catalyst being the unrest in Egypt with fear that the Suez canal could be closed for traffic.

Markets around the world are reaching new highs due to strong earnings results and better economic statistics.

The recovery has gained traction and interest rates are low, which is beneficial for stocks.

We've had two fuel price increases with a third one looming at the end of February, which looks to be the biggest one so far. It won't be too long for inflation to start rising and thus interest rates to start rising too.

It looks like we've hit the bottom of the interest rate cycle for now with an increase in the prime lending rate on the cards during the second half of 2011.

Wait for pullbacks to go long. We're in a very strong bull market and going short is a definite gamble.

Safe trading

Steady ahead

Trading yesterday was a bit lacklustre with volumes subdued. The American markets were closed due to Martin Luther King Day being celebrated.

One does get the feeling that the markets has had a good run and that a correction is due. But, it seems that the markets have stabilized and have been taking the bad news in its stride.

Earnings season has kicked off in the US and companies such as Alcoa and Intel have reported better than expected results. Apple and Citigroup report results today.

With volatility at fairly low levels, we expect the market to trade sideways or creep upwards slowly, until the next event. The markets can even be boosted by better than expected earning results.

Safe trading

2011: The year ahead

2010 ended on a high note and 2011 started off well.

Debt contagion fears are the flavour on the news channels at the moment with the market speculating that Portugal will be forced to take a bailout and Spain to follow.

The strength of our currency is protecting us from inflation at the moment. Just look at what soft commodities such as wheat and corn are doing price wise. Oil is also flirting with the $100 per barrel level, which will have an effect on the pace of inflation.

Commodity stocks could be an attractive investment for 2011 as the world economies pull themselves out of the financial crisis. It looks to be a long walk before we are out of the woods yet.

If the Euro debt situation can be contained properly, we should expect less volatility in 2011.

Safe trading

Thin trade expected for the last of 2010

It's amazing to see our market only 1300 points from its pre-crisis levels.

The European markets have opened positive and it looks like tension in the East have calmed down for now. The Asian markets have also reacted positively with most of them ending in the green.

Portugal's credit rating has been put under review by Moody's, but the market has not reacted adversely to it. It's almost as if the market is expecting these downgrades.

The US markets points to a positive open as well as their future indexes are up by about 0.5%.

There is not any significant news scheduled for this week, except for Thursday when unemployment claims will be published.

During the recent months we've seen a turnaround in the US unemployment figures and positive sentiment among consumers. We can also see it in their spending.

It looks like the recovery as under way with companies posting strong results.

Volumes on the markets are very subdued to it being close to Christmas.

Safe trading and a blessed festive season

Markets to continue its rally to the end of the year?

By the looks of it, it looks like the market is going to continue its upward trend. At least up until the end of December 2010.

After weak employment figures out of the US on Friday, the Dollar weakened against the Euro and the next target would be $1.37 and after that $1.40.

As we've reiterated in the recent weeks, is that commodity prices tend to rise as the dollar weakens.

The JSE is up 0.2% although Billiton, which is one of the commodity heavyweights, is up 2.5%.

Gold is also at record high levels and copper as well.

Banks remain on the back foot at the moment.

The ALSI future has also made a new 2 year high today and is currently tradin gat 28460.

Trade in December is usually thin and the feel good mood tend to influence investors/traders to buy the market up.

Safe trading