The world has woken to the news that public enemy number 1 (well at least the US enemy number 1) - Osama Bin Laden - has been killed in a mansion in Pakistan in a joint special forces attack. It has been almost 10 years since that fateful day since September 11th and you can understand the relief in the US that this fight has been "won".
The cynic in me suggests that this news probably puts paid to Donald Trumps presidential ambitions.... All he could produce was a birth certificate of sorts for Barack Obama....
... no wonder Obama thought he probably was justified in taking a dig at the property billionaire in the press conference yesterday.
So what does this mean for markets and trading?
- I gotta fess up. Friday's spike in Gold burnt me and I was stopped out there.
- Still in with my short oil from $125 and long US$ / short Japanese Yen trade
In my head I had suspected a bit more of a "patriot rally" in terms of the US dollar but lets wait it out. The yen is weakening and as the rest of global markets digest the news, there might be a bit more enthusiasm for the trade.
Oil at $125 is in my humble opinion overbought and being driven by this commodity bubble and being held up unnaturally high with social tensions in places like Libya, Syria, Egypt etc. But there is nothing new in these areas to suggest that this kind of price is justified, especially with economic data suggesting the economy is staggering.
I do agree with the early analysis from STRATFOR that this probably means that the US can hasten its departure from Afghanistan. While the US has made a lot of noise about its humanitarian support / obligations to the region, the fight has been going on for 9 and a half years and Americans are tired of this battle. Since the initial "shock and awe" they've been left fighting for a country which is politically and economically worthless.
With the US elections around the corner, it will do a lot for popularity ratings to show US soldiers packing their bags and heading home to their loved ones. US soldiers departing the Middle East will invariably be good publicity in the near-term.
So for now I'll stay short oil and long the dollar... counter-intuitive maybe but its probably about time the world started to settle down for a bit and put this chapter behind us.
Showing posts with label Gold. Show all posts
Showing posts with label Gold. Show all posts
Sunday, May 1, 2011
Thursday, January 27, 2011
Liking platinum
I have been watching these gold and platinum prices with some interest and this recent sell-off has caught my eye this evening.
Personally I thought gold would hold around the $1320 mark but it went straight through that and maybe $1310 will act as some kind of support level. I think the thing which has surprised me on this front is the reason S&P rating cut in Japan, I thought there might be some money cycled out of there and into precious metal commodities... apparently not yet.
Whatever, I find gold over-rated and really only for the looneys.
The metal which does interest me though is platinum and I've taken a small long position on it at $1790 on the April future. There is nothing complicated about my thinking here... look around SA at the moment, everything is being held together on a shoe-string - roads, traffic lights, rail etc etc. Throw in that the rain has soaked the coal for the power stations and there is now a massive transport strike scheduled for early in February.
If the signs of economic improvement are to be believed and the emphasis on clean energy keeps being punted and that platinum is expected to come out of South Africa then surely you can't go too far wrong backing the metal from here?
On the equity front only two real plays are jumping out at me:
Brait
Rushed up to R26.50 before a cautionary announcement was put out and then the stock slumped to R22 but has subsequently bounced. Good play at these levels considering the dividend
RE:CM & Calibre prefs (RACP)
You can buy RACP at less than the NAV of a cash shell... To me that is simply brain-dead if you believe that Piet Viljoen and his team can generate even the most basic long-term investment return.
With the fun and games in Japan earlier today with the S&P re-rating I reckon Friday could be an interesting day for traders. Let's see who keeps their heads.
Personally I thought gold would hold around the $1320 mark but it went straight through that and maybe $1310 will act as some kind of support level. I think the thing which has surprised me on this front is the reason S&P rating cut in Japan, I thought there might be some money cycled out of there and into precious metal commodities... apparently not yet.
Whatever, I find gold over-rated and really only for the looneys.
The metal which does interest me though is platinum and I've taken a small long position on it at $1790 on the April future. There is nothing complicated about my thinking here... look around SA at the moment, everything is being held together on a shoe-string - roads, traffic lights, rail etc etc. Throw in that the rain has soaked the coal for the power stations and there is now a massive transport strike scheduled for early in February.
If the signs of economic improvement are to be believed and the emphasis on clean energy keeps being punted and that platinum is expected to come out of South Africa then surely you can't go too far wrong backing the metal from here?
On the equity front only two real plays are jumping out at me:
Brait
Rushed up to R26.50 before a cautionary announcement was put out and then the stock slumped to R22 but has subsequently bounced. Good play at these levels considering the dividend
RE:CM & Calibre prefs (RACP)
You can buy RACP at less than the NAV of a cash shell... To me that is simply brain-dead if you believe that Piet Viljoen and his team can generate even the most basic long-term investment return.
With the fun and games in Japan earlier today with the S&P re-rating I reckon Friday could be an interesting day for traders. Let's see who keeps their heads.
Monday, October 12, 2009
Monday - quick note
Hello boys and girls
A busy day on Monday but one which ultimately went nowhere fast.
The primary reason for my angst was that Sasol went ex-dividend today which lopped R6 off its price - money which was quickly recovered as markets continued to rally.
Sasol eventually finished the day off 80c at R288 with the SOLSBG warrant ticking up 2c to finish at 31c.
Goldman Sachs today set a revised (downward) price target on the oil firm with a 12-month target of R403... still a handy premium to where it is now!
Gold carried on trucking up nicely and I have some small long positions open on platinum as well. If there are legs to this economic recovery then an industrial precious metal like platinum could benefit at present levels.
Anyway tomorrow is another day - happy trading!
A busy day on Monday but one which ultimately went nowhere fast.
The primary reason for my angst was that Sasol went ex-dividend today which lopped R6 off its price - money which was quickly recovered as markets continued to rally.
Sasol eventually finished the day off 80c at R288 with the SOLSBG warrant ticking up 2c to finish at 31c.
Goldman Sachs today set a revised (downward) price target on the oil firm with a 12-month target of R403... still a handy premium to where it is now!
Gold carried on trucking up nicely and I have some small long positions open on platinum as well. If there are legs to this economic recovery then an industrial precious metal like platinum could benefit at present levels.
Anyway tomorrow is another day - happy trading!
Sunday, October 11, 2009
Bits and bobs
Tough week - just when you think you have things figured out you get worked over....
Before I get into my post this week I have to post something from Paul Theron over at South African asset management firm Vestact which I thought rang so true:
Deadly financial plan
FINANCIAL planning is deadly boring. What is worse, most of the assumptions are wild guesses, like the rate of inflation, your date of death and returns on equities.
Blogger Carl Richards suggests that it might be better to forget all the thumb sucking and just focus on some of the things we can control, and then hope for the best.
So how’s this for a financial plan. (1) Save as much as you reasonably can; (2) Don’t lose money through risky or stupid investments; (3) Draw down no more than 4%-6% of your assets each year once you retire.
There you go, all sorted.
...... And here we monkeys are trying to time or beat the market with our "systems" and analysis!
Sometimes I think keeping it all nice and simple beats this whole trading lark ... and then I get it right and I feel like a genius for a couple of hours!
Things that occur to me:
I do remain bearish on some aspects of the global economy but there is some genuinely positive data coming through:
Before I get into my post this week I have to post something from Paul Theron over at South African asset management firm Vestact which I thought rang so true:
Deadly financial plan
FINANCIAL planning is deadly boring. What is worse, most of the assumptions are wild guesses, like the rate of inflation, your date of death and returns on equities.
Blogger Carl Richards suggests that it might be better to forget all the thumb sucking and just focus on some of the things we can control, and then hope for the best.
So how’s this for a financial plan. (1) Save as much as you reasonably can; (2) Don’t lose money through risky or stupid investments; (3) Draw down no more than 4%-6% of your assets each year once you retire.
There you go, all sorted.
...... And here we monkeys are trying to time or beat the market with our "systems" and analysis!
Sometimes I think keeping it all nice and simple beats this whole trading lark ... and then I get it right and I feel like a genius for a couple of hours!
Things that occur to me:
I do remain bearish on some aspects of the global economy but there is some genuinely positive data coming through:
- Sometimes we traders get nailed by short-term "noise" that we don't look at what is right in front of us. I took a look at these charts which plotted the Baltic Dry Index (BDI) against Gold, Oil etc etc and it makes for interesting reading - underlying shipping rates are on the up (solidly)
- These string of natural disasters intrigue me and I am surprised they have been given so little coverage by the financial media. There is likely to be a lot of government sponsored re-building which will need to take place here in the coming months. Would be interesting to know how this will impact supply and demand of commodities
- I still think there is tension with Iran and I don't see the oil price going South any time soon except perhaps against a rebound in the dollar (see below)
- While I have been shouted down on it by certain people - I still believe that Pakistan is a far bigger economic and security threat to the world than people are giving it credit for. For crying in a bucket they stormed a millitary base and held soldiers captive in one of the countries which has active nuclear armaments!
- I see Jim Rogers is calling Gold to $2300 over the next decade and oild somewhere between $150 - $200 as well but sounds like a lot of noise and very unspecific.
- I am still long Sasol (probably short-term target of R310). The Rand to Dollar exchange rate has played havoc with this trade but it seems to have ground itself higher, despite the currency. Still think there is a bit more legs to this trade
- I get the sense that we might be about to see the dollar do a short-term bounce (which might tie give a boost to SOL). Yes it has been sold down hard but at some stage but when something is completely out of favour, it suddenly surprises. It is also still a "hard" currency and with many export dependant economies needing a strong dollar exchange rate, it might not be a bad idea to look at the USD recovering in the short-term
- I have put on some SMALL and TENTATIVE shorts on Gold as well on the back of a dollar revival
- The 10000 point Dow must be on the cards for this week
Sunday, August 9, 2009
Interesting market to be in
It is a tough market to be in at the moment. Every sense is screaming that equity prices are looking increasingly expensive but the market seems to be disagreeing and there is more green in Asia today after increasingly "bullish" economic data out of the US on the jobs front.... I have no comment on this data beyond saying that you cannot have an economic recovery while the number of unemployed continue to rise.
In terms of open trading positions I have a long on Gold from US$955 and Platinum from US$1250. Also taken a bit of a dirty little punt on sugar having read that there is a global shortage which is likely to fuel prices in the coming months.
The sugar one I can't comment on - it really was just a flutter and having looked around the reality of of sugar supply-side shortfall seems to be credible.
Platinum I think will see some increased demand going into the second half of 2009 with some re-stocking in the auto sector (the so called "cash-for-clunkers" programme) and maybe some jewellery demand as the economy stabilises. My guess is we could see platinum testing $1285 again this week.
Gold - The yellow metal has worked hard to get back above the $950 an ounce mark. There have been a couple of stomach curdling $10 - $15 drops on action in the dollar market - which have hurt me on stop losses a couple of times - but the metal seems to be behaving a little better after the sell-off last week. I think we could realistically see gold test $980 this week and I would be tempted to take some part profits at $975 if it gets a bit of wind under its sails.
On the equity front I've continued the habit of accumulating a mixture of ALSI constituents and the exchange traded funds (ETFs) that have been mentioned on this blog before.
In terms of open trading positions I have a long on Gold from US$955 and Platinum from US$1250. Also taken a bit of a dirty little punt on sugar having read that there is a global shortage which is likely to fuel prices in the coming months.
The sugar one I can't comment on - it really was just a flutter and having looked around the reality of of sugar supply-side shortfall seems to be credible.
Platinum I think will see some increased demand going into the second half of 2009 with some re-stocking in the auto sector (the so called "cash-for-clunkers" programme) and maybe some jewellery demand as the economy stabilises. My guess is we could see platinum testing $1285 again this week.
Gold - The yellow metal has worked hard to get back above the $950 an ounce mark. There have been a couple of stomach curdling $10 - $15 drops on action in the dollar market - which have hurt me on stop losses a couple of times - but the metal seems to be behaving a little better after the sell-off last week. I think we could realistically see gold test $980 this week and I would be tempted to take some part profits at $975 if it gets a bit of wind under its sails.
On the equity front I've continued the habit of accumulating a mixture of ALSI constituents and the exchange traded funds (ETFs) that have been mentioned on this blog before.
Monday, June 22, 2009
But but but....
A sea of red greets traders today with Asia kicking us off. Had a couple of overnight shorts in place on both the Hang Seng and Nikkei which I've cashed out... Still reckon there is more downside to this leg but nobody ever went broke taking a profit.
The only thing I've got open now is a short on the Dow with a downward trend back in place as the rally fizzles out after the World Bank came out yesterday with some negative comments about future growth potential... which was in contrast to comments attributed to George Soros who said "The worst was behind us"
I am by no means a perma-bear and I think there are some nice value opportunities in the market at the moment - particularly in the South African market - but we need to appreciate how skittish investors are.
The bid by Xstrata for Anglo American gave the local market a bit of a boost but having chatted to a few people I get the sense that the bid is not going to get the support needed and if the "transaction premium" gets yanked out from Anglo then the JSE Top40 could take a smack.
Commodity futures are down as well. I thought there might be a bit more support for gold at 920 and oil at US$68 (particularly after its recent strength) but I guess next areas of interest for me are gold at around US$910 and oil at US$65.
(On that - I noticed an interesting story on Bloomberg about Japanese banks threatening to pull some funding from Venezuelan oil assets in response to non-payment and nationalisation threats... could this be a short term catalyst?)
Down still seems to be the only direction.
The only thing I've got open now is a short on the Dow with a downward trend back in place as the rally fizzles out after the World Bank came out yesterday with some negative comments about future growth potential... which was in contrast to comments attributed to George Soros who said "The worst was behind us"
I am by no means a perma-bear and I think there are some nice value opportunities in the market at the moment - particularly in the South African market - but we need to appreciate how skittish investors are.
The bid by Xstrata for Anglo American gave the local market a bit of a boost but having chatted to a few people I get the sense that the bid is not going to get the support needed and if the "transaction premium" gets yanked out from Anglo then the JSE Top40 could take a smack.
Commodity futures are down as well. I thought there might be a bit more support for gold at 920 and oil at US$68 (particularly after its recent strength) but I guess next areas of interest for me are gold at around US$910 and oil at US$65.
(On that - I noticed an interesting story on Bloomberg about Japanese banks threatening to pull some funding from Venezuelan oil assets in response to non-payment and nationalisation threats... could this be a short term catalyst?)
Down still seems to be the only direction.
Sunday, June 7, 2009
Crazy Friday
Geez how crazy was that Friday?? Enough to drive me to drink - not that I need an excuse of course.
The short platinum and copper trades took a while to get going but eventually they joined the tumble in metals prices and there was a bit of profit for Friday. The job numbers came in bad and NFP reflected the real problems the US is facing - you can massage what you like things aren't great...
The commodities and underlying equity markets took off like a bat outta hell and then suddenly started losing ground with Gold falling to US$955.
I entered a long pozzie on Gold just under US$960 anticipating something of a bounce as some "normality" returned to the market. Gold gyrated around a bit like a stripper at the Lollipop Lounge and just like the pros - promised a lot and delivered bugger all.
Personal feeling - commodities still look toppish and with the job numbers still showing no sign of a turnaround they seem to be looking like we could be about to start a second down-leg (particularly in the base metals and platinum). Gold and Oil still seem to be trading as something of a "risk" proxy.
There is some talk of the dollar starting to strengthen on the back of some prospects of rising interest rates in the US. The problem with interest rates going up is that its going to deaden any of these so called "green-shoots"...
No real conviction for direction tomorrow beyond expecting a bit of a rebound in gold.
The short platinum and copper trades took a while to get going but eventually they joined the tumble in metals prices and there was a bit of profit for Friday. The job numbers came in bad and NFP reflected the real problems the US is facing - you can massage what you like things aren't great...
The commodities and underlying equity markets took off like a bat outta hell and then suddenly started losing ground with Gold falling to US$955.
I entered a long pozzie on Gold just under US$960 anticipating something of a bounce as some "normality" returned to the market. Gold gyrated around a bit like a stripper at the Lollipop Lounge and just like the pros - promised a lot and delivered bugger all.
Personal feeling - commodities still look toppish and with the job numbers still showing no sign of a turnaround they seem to be looking like we could be about to start a second down-leg (particularly in the base metals and platinum). Gold and Oil still seem to be trading as something of a "risk" proxy.
There is some talk of the dollar starting to strengthen on the back of some prospects of rising interest rates in the US. The problem with interest rates going up is that its going to deaden any of these so called "green-shoots"...
No real conviction for direction tomorrow beyond expecting a bit of a rebound in gold.
Thursday, May 21, 2009
Go Gold go!
Absolutely loving this gold price action and pretty sure we've got clear air up to $970 before the end of the week. At this moment in time we're floating around the $953 mark and the only thing that hasn't played the game in terms of my AngloGold call has been the strong Rand. (or is that more specifically a weak dollar)
Still pretty confident that long ANG is a good place to be going into tomorrow.
Sasol was looking fine but dipped off today as the exchange rate strengthened and US markets sold down but still pretty happy with where we're at.
Looking forward to tomorrow, I reckon there is going to be plenty of short covering around gold as people pile in and technically I don't see the Rand / Dollar getting through the R8.20 mark to the dollar.... in fact I think there might be some hot money being pulled from emerging market currencies tomorrow...
Let's see ...
Still pretty confident that long ANG is a good place to be going into tomorrow.
Sasol was looking fine but dipped off today as the exchange rate strengthened and US markets sold down but still pretty happy with where we're at.
Looking forward to tomorrow, I reckon there is going to be plenty of short covering around gold as people pile in and technically I don't see the Rand / Dollar getting through the R8.20 mark to the dollar.... in fact I think there might be some hot money being pulled from emerging market currencies tomorrow...
Let's see ...
Monday, May 18, 2009
Hhhhmmm....
Honestly can't believe the strength of this rally - am I missing something
I took a couple of positions on Monday - long Sasol (SOL) @R294 and long AngloGold (ANG) R314 and then stuck in some wider reaching short positions.
Of course ANG promptly announced its bond issue and the share price took a bit of a smack beneath R300.
Interesting to see there is a bit of a buzz in the gold price despite the equity rally - we're sitting around between 920 and 930...
I took a couple of positions on Monday - long Sasol (SOL) @R294 and long AngloGold (ANG) R314 and then stuck in some wider reaching short positions.
Of course ANG promptly announced its bond issue and the share price took a bit of a smack beneath R300.
Interesting to see there is a bit of a buzz in the gold price despite the equity rally - we're sitting around between 920 and 930...
Tuesday, February 17, 2009
Know thy strategy!
Gold is the name of the game at the moment. The precious metal is absolutely flying and touched US$970 an ounce yesterday. Importantly for South African gold shares the rand didn't strengthen against the US dollar as has been happening in the past.
This boosted the South African gold index in excess of 6% on Tuesday. For the rest it was something of a slaughter house:
All share - Down 2.93%
Top 40 - Down 2.97%
Industrial - Down 3.41%
Financial - Down 5.52%
Ouch!
On top of that the Dow has continued its slide downward losing another 297 points to trade at 7552. I had a target of around 6800 as my low on this index before a possible bounce.
On Bloomberg I see there is an article saying that GM and Chrysler are seeking another$21.6 Billion in aid and are planning to knock another 50000 jobs off of their workforce. That will be a huge blow to Obama and his turnaround / bailout initiatives.
Know thy strategy!
For those investors who keep looking at their portfolios and just see red: I know it sounds cliched but you have to know what your strategy is and stick to it.
If your belief is that the Dow is going to 6800 and the market doesn't offer much value then stick to that conviction and start building up funds to take advantage of the market... Don't look at the nest-egg you've built up and see some cash to blow on a car or some other luxury.
In the same way if you believe we are already in value territory and want to carry on buying quality shares yielding a nice dividend ... then stick to it!
Don't do what I did and rush off converting quality shares into hopeful punts in the hope that I would make some small trading gains. The strategy sounds good in your head, until you realise that with so much volatility in the market you start trading your way backwards on a strategy that is supposed to help you take advantage of down markets...
Best of luck.
This boosted the South African gold index in excess of 6% on Tuesday. For the rest it was something of a slaughter house:
All share - Down 2.93%
Top 40 - Down 2.97%
Industrial - Down 3.41%
Financial - Down 5.52%
Ouch!
On top of that the Dow has continued its slide downward losing another 297 points to trade at 7552. I had a target of around 6800 as my low on this index before a possible bounce.
On Bloomberg I see there is an article saying that GM and Chrysler are seeking another$21.6 Billion in aid and are planning to knock another 50000 jobs off of their workforce. That will be a huge blow to Obama and his turnaround / bailout initiatives.
Know thy strategy!
For those investors who keep looking at their portfolios and just see red: I know it sounds cliched but you have to know what your strategy is and stick to it.
If your belief is that the Dow is going to 6800 and the market doesn't offer much value then stick to that conviction and start building up funds to take advantage of the market... Don't look at the nest-egg you've built up and see some cash to blow on a car or some other luxury.
In the same way if you believe we are already in value territory and want to carry on buying quality shares yielding a nice dividend ... then stick to it!
Don't do what I did and rush off converting quality shares into hopeful punts in the hope that I would make some small trading gains. The strategy sounds good in your head, until you realise that with so much volatility in the market you start trading your way backwards on a strategy that is supposed to help you take advantage of down markets...
Best of luck.
Wednesday, February 11, 2009
Gold flying!
The gold price has spiked up sharply at the start of US trade.
Currently the metal is trading at US$942 after starting earlier today at US$902.
South African equities could sorely do with a lift in the underlying prices of precious metals like Gold and Platinum. The spectre of massive job losses in these sectors is weighing heavily on South Africa and if metals prices are up this might serve as a bit of buffer to the producers....
For example Anglo Platinum earlier this week said it was planning to shed something like 10000 jobs in the next few weeks. Platinum has added US$31 to take the price to US$1067. Nowhere near levels seen in previous years but it might help.
But like I've warned before - I get nervous when we see big unexpected spikes in the gold price.... To me it serves as a precursor for more dollar weakness and structural problems in the financial market...
Time will tell
Currently the metal is trading at US$942 after starting earlier today at US$902.
South African equities could sorely do with a lift in the underlying prices of precious metals like Gold and Platinum. The spectre of massive job losses in these sectors is weighing heavily on South Africa and if metals prices are up this might serve as a bit of buffer to the producers....
For example Anglo Platinum earlier this week said it was planning to shed something like 10000 jobs in the next few weeks. Platinum has added US$31 to take the price to US$1067. Nowhere near levels seen in previous years but it might help.
But like I've warned before - I get nervous when we see big unexpected spikes in the gold price.... To me it serves as a precursor for more dollar weakness and structural problems in the financial market...
Time will tell
Monday, January 26, 2009
Ja, no, WHATEVER!
A 38 point "rebound" on the Dow and we're getting all excited that we've hit a bottom?! Strewth...
A big part of the US rebound was driven by better than expected US Home Sales figures and this got the Yanks all nice and bubbly and the Dow was up nearly 2% until reality hit home and the market scratched out a small gain.
Asia has also started out green, but I wouldn't hold my breath on this one - even if it plays havoc with my short on Sasol.
Home sales
I didn't see much coverage of it and I don't profess to be a master of the US financial reporting sector but at some point home sales figures have to bounce for the simple reason that there is a false "buyer" in the market and it sure as hell ain't the US consumer....
Exactly the same thing is happening in South Africa at the moment - the consumers are getting their houses repossesed and the banks are sending out their agents to buy them up because there is no demand for the properties from consumers who can't afford them.
I also think its quite convenient that it came out a week after Obama signals in "a new era"... but that might just be the conspiracy theorist in me...
Retrenchments
You want to know to know why I doubt its the consumer rushing out to buy a new house?! Try this for the reason:
Put simply - That's 60000 odd consumers having to further watch their spending or fill up their cars or invest in equity markets or the property market that needs to come into the system...
Gold
The gold price broke through US$900 level yesterday following up on the gains made on Friday.
I tend to get a little excited when gold starts firing for the simple reason that it tends to be a pre-cursor to further carnage. That's a bit of a generic statement but I think its justified in the current environment.
Sasol short
I remain with an open short position on Sasol although I think movements in the market yesterday and probably today are going to make position look a little unattractive but let's wait and see.
In my head I still see the Dow dropping probably another 30% from these levels and further downside on the ALSI of between 10 and 15%.
Let's see how today plays out and reassess at the end of the trading day.
A big part of the US rebound was driven by better than expected US Home Sales figures and this got the Yanks all nice and bubbly and the Dow was up nearly 2% until reality hit home and the market scratched out a small gain.
Asia has also started out green, but I wouldn't hold my breath on this one - even if it plays havoc with my short on Sasol.
Home sales
I didn't see much coverage of it and I don't profess to be a master of the US financial reporting sector but at some point home sales figures have to bounce for the simple reason that there is a false "buyer" in the market and it sure as hell ain't the US consumer....
Exactly the same thing is happening in South Africa at the moment - the consumers are getting their houses repossesed and the banks are sending out their agents to buy them up because there is no demand for the properties from consumers who can't afford them.
I also think its quite convenient that it came out a week after Obama signals in "a new era"... but that might just be the conspiracy theorist in me...
Retrenchments
You want to know to know why I doubt its the consumer rushing out to buy a new house?! Try this for the reason:
- Caterpillar: 20,000 job cuts
- Pfizer: 19,000 job cuts (10% reduction), plus additional layoffs due to merger with Wyeth
- Sprint Nextel: 8,000 job cuts
- Home Depot: 7,000 job cuts (ODD IF THE CONSUMER WAS TURNING THE CORNER HUH?!)
- Texas Instruments - 12% of global workforce
- Philips: 6,000 jobs
- Lincoln National Corp - 540 jobs
Put simply - That's 60000 odd consumers having to further watch their spending or fill up their cars or invest in equity markets or the property market that needs to come into the system...
Gold
The gold price broke through US$900 level yesterday following up on the gains made on Friday.
I tend to get a little excited when gold starts firing for the simple reason that it tends to be a pre-cursor to further carnage. That's a bit of a generic statement but I think its justified in the current environment.
Sasol short
I remain with an open short position on Sasol although I think movements in the market yesterday and probably today are going to make position look a little unattractive but let's wait and see.
In my head I still see the Dow dropping probably another 30% from these levels and further downside on the ALSI of between 10 and 15%.
Let's see how today plays out and reassess at the end of the trading day.
Friday, January 23, 2009
Friday update
Geez these crazy Americans are doing everything in their power to defend the 8000 level on the Dow...
My Sasol short
I remain in my Sasol short. There were a couple of times were the market looked like it was going to give but the Rand slipped in late trade and I think that saved a couple of hedges from a really bad day....
Pity but I'll get over it and I remain short.
Watching US trade I see that the market is bouncing every time it gets close to 8000 and the oil price has moved up a bit - probably going to count against the Sasol position.
The trend remains down and there's no conviction in the US markets either.
Sappi
I see the guys over at the ShareTips site have also hit on the intra day volatility in Sappi (SAP)
For traders who are looking for some action, we'd also recommend a look at Sappi. Plenty of action either way which might catch your eye.
Gold
Gold has spiked up nicely in late US trade to flirt with the US$900 an ounce mark and if the dollar / rand exchange rate continues to weaken then the gold bulls will have a ball...
Fundamentally Gold Fields probably isn't the worlds favourite share at the moment but its got some definite volatility and without stating the obvious if the gold price and rand go the right way who really cares WHAT the CEO has to say....
My Sasol short
I remain in my Sasol short. There were a couple of times were the market looked like it was going to give but the Rand slipped in late trade and I think that saved a couple of hedges from a really bad day....
Pity but I'll get over it and I remain short.
Watching US trade I see that the market is bouncing every time it gets close to 8000 and the oil price has moved up a bit - probably going to count against the Sasol position.
The trend remains down and there's no conviction in the US markets either.
Sappi
I see the guys over at the ShareTips site have also hit on the intra day volatility in Sappi (SAP)
For traders who are looking for some action, we'd also recommend a look at Sappi. Plenty of action either way which might catch your eye.
Gold
Gold has spiked up nicely in late US trade to flirt with the US$900 an ounce mark and if the dollar / rand exchange rate continues to weaken then the gold bulls will have a ball...
Fundamentally Gold Fields probably isn't the worlds favourite share at the moment but its got some definite volatility and without stating the obvious if the gold price and rand go the right way who really cares WHAT the CEO has to say....
Monday, November 24, 2008
Gold shares fly
I'm sorry but somebody has to explain these markets to me and why a two-day record breaking rally on the Dow is all that exciting??
Locally SA markets took off like a bat outta hell with the Gold index adding some 17%.
The gold price rallied nicely on Friday and added a few more dollars today.
On the SA market the unhedged producers such as Harmony Gold (22%) and Gold Fields (21%) had a very pleasant day. The Newgold ETF also made some nice gains but nowhere near as spectacular....
In the bigger picture, the gold index isn't a particular heavyweight (but we did touch on it in a recent post), but I think South Africans just have this affinity with Gold...
But scrape beneath the surface and the safe haven metal is the one flying and getting everyone all worked up in the last 72 hours. The reality is that the market is on the move because the US government has agreed to bail out another financial services firm....
These are the headlines on Bloomberg to prove my point:
- Citigroup Gets $306 Billion Shield From Losses, Capital After Stock Dive
- Home Resales in U.S. Fall as Foreclosures Push Prices Down Most on Record
- BlackRock Fires Four Managers, Six Analysts in First Cuts in Its History
- Fed Must Speed Aid to Auto Credit Units, Schumer Says
- AIG Auto Unit to Drop Damaged Brand to Help Sale
- New York May Lose 225,000 Jobs, Comptroller Says
- Obama Vows Bold Moves to Avoid Millions of Lost Jobs
And this is grounds for a rebound??
Two solid days of gains is pretty hard to disagree with but I still maintain that you're buying into a sucker rally in the short term.....
With the day belonging to Harmony, I thought it only appropriate to post a picture of their Doornkop operations to brighten the blog up a bit....
Friday, November 21, 2008
Here Be Dragons...
In late US trade yesterday, stocks on the Dow Jones and S&P500 surged in excess of 6% as President-elect Barack Obama picked New York Federal Reserve Bank chief Timothy Geithner to replace Henry Paulson.
I don’t follow US people too much, but judging from the market reaction, he comes with a good reputation. But on the subject of whether one man can stop what is fast looking like a protracted financial crisis – the jury is still out.
What I thought was an interesting ‘leading’ indicator was the difference in price movements in the platinum and gold prices yesterday. Gold the traditional safe haven, platinum the industrial and ‘luxury’ metal for jewellery.
The gold price shoots up to US$801 an ounce while platinum is marginally firmer around US$824… So in other words the ‘safe’ metal has gone up while the industrial metal (or luxury metal – depending on how you look at it) – which is supposed to indicate that consumer and business confidence may be returning hasn’t got near the same level of ‘emotional’ support from the markets.
Hhhhhmmmmm wonder if the real market is telling us something there>
Don’t get me wrong, I think at these levels the market may be offering some value for long term investors. I’ve been buying index tracking funds for some offshore exposure as well as some SA equities for a while now – but those have got a longer term investment horizon. The point is – if you’re planning to buy in on the rally in the US – I get the sneaky suspicion on my investor map that it should be marked with the Here Be Dragons (HBD) symbol.
Just something else that is worrying me around short term shocks to the SA market… Maria Ramos has just been appointed as the new CEO of Absa (As of 1 March 2009). Ramos and Gill Marcus have denied that there will be any conflict of interest with Trevor Manuel (Ramos’ partner). There is some concern that Ramos being appointed to a major bank may indicate that Manuel may step down next year – we all remember what happened the last time rumours started circulating that he had resigned with all the other cabinet ministers….
I don’t follow US people too much, but judging from the market reaction, he comes with a good reputation. But on the subject of whether one man can stop what is fast looking like a protracted financial crisis – the jury is still out.
What I thought was an interesting ‘leading’ indicator was the difference in price movements in the platinum and gold prices yesterday. Gold the traditional safe haven, platinum the industrial and ‘luxury’ metal for jewellery.
The gold price shoots up to US$801 an ounce while platinum is marginally firmer around US$824… So in other words the ‘safe’ metal has gone up while the industrial metal (or luxury metal – depending on how you look at it) – which is supposed to indicate that consumer and business confidence may be returning hasn’t got near the same level of ‘emotional’ support from the markets.
Hhhhhmmmmm wonder if the real market is telling us something there>
Don’t get me wrong, I think at these levels the market may be offering some value for long term investors. I’ve been buying index tracking funds for some offshore exposure as well as some SA equities for a while now – but those have got a longer term investment horizon. The point is – if you’re planning to buy in on the rally in the US – I get the sneaky suspicion on my investor map that it should be marked with the Here Be Dragons (HBD) symbol.
Just something else that is worrying me around short term shocks to the SA market… Maria Ramos has just been appointed as the new CEO of Absa (As of 1 March 2009). Ramos and Gill Marcus have denied that there will be any conflict of interest with Trevor Manuel (Ramos’ partner). There is some concern that Ramos being appointed to a major bank may indicate that Manuel may step down next year – we all remember what happened the last time rumours started circulating that he had resigned with all the other cabinet ministers….
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