Unfrigginbelievable!

So NOW the bloody fundamentals come into play and the US drops like a friggin rock...?! I'm rapidly losing my sense of humour here...

I haven't quite been stopped out of my Sasol long position but certainly not enjoying the lack of trend in the market at the moment... Maybe that's a problem I need to look at more closely... Volatility is screwing up positions but the underlying question should be: WHAT THE $@CK IS THE TREND?!

Basically the US dropped when they realised they didn't feel all that confident that the bank bailout plan was going to be able to stave off problems in the US banking market. This set panic across global markets initially as all the tentative confidence in the markets evaporated.

SA markets have a bit of a "shock-absorber" as the Rand weakened a bit and after the initial Blitzkrieg on our markets. Stocks seemed to have bounced off their low now that Europe is in our markets.

A bit of a dog show on the markets at the moment as we try and shrug off what has happened in the US...

But anyway I digress.

My thoughts this morning turned to pair trading i.e. taking long and short positions simultaneously as a way of dealing with the intra-day / intra-week volatility we're experiencing at the moment. It is not a strategy I've previously employed but I guess it holds some appeal for me with such big movements.

My initial thoughts were to look at Long Sasol / Short All Share or Long All Share / Short SAP for example. Bounced it off the guys on the Page 88 forum and apparently clients at Cortex have had some success with the Platinum counters in recent months - Long AMS / Short IMP.

Other recommendations were:
(MTN / Telkom)
(Anglo American / Billiton)
(Gold Fields / Harmony)

I guess the trick would be to find weightings for these positions and taken an active role managing them... Obviously there is also a higher level of investment required for these kind of transactions.

And THAT my friends will be my Plan Of Action for the next few days...