9 November 2009
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Johannesburg — COULD the Soros crystal ball be disturbing the recovery? Early last week the market did a sharp down-flip giving investors a chance to top up their portfolio.
Chart-users had already identified that the market would ease for a while and identified the pick-up on November 4 using breaks through an ultra short- term moving average by the overbought/oversold plotting. Was the down-flip caused by doom-saying George Soros' warning of recession next year or 2011? Should such a recession materialise, he'll no doubt make a killing by short-selling the market as he did to sterling in the late 1980s. That Soros money-market manipulation cost Ben and me a considerable amount of boodle as we were forced to use a "financial adviser" to transact the switch from pounds to guilders. Since then I've classed gurus and financial advisers in the same category as lawyers and used-car salesmen.
Some investors hang on to the utterances of gurus, but they should remember that these guys "talk from their book" -- they have something to gain by what they predict. A local wannabe guru once forecast that the falling market would bounce up at exactly 11 am on a particular date.
He had stacks of buying orders on to be transacted at exactly that time on that date. Not in the Soros wealth league, he was possibly using other people's money to fund the exercise. He might have sold the shares at limits that covered costs as, rather money profits he was after the profit of being considered a guru.
Last week's big news was the dollar gold price reaching a record high. Unfortunately, local investors in gold have not enjoyed the full fruits because of the dollar-rand exchange rate. Since July 2, the dollar gold price has put in 18%, but the rand gold price has lifted by only 14% because the rand has gained 4% against the dollar. Half the rand's latter half October loss has been reversed.
The next count is 1/R9, but if Trevor Manuel (trusted by foreign investors) is ousted and Julius Malema (feared by foreign investors) gets his own way, the R9 resistance will be history. The next count for gold is 1142 and there are further, less certain counts, up to 1317. The count for the rand gold price is R9,858.
Gold shares continue to disappoint. Last week's action was mostly in low priced shares. Simmers and Arm looks set for good short-term rises. Volumes in Petmin are high but it may lose ground. The Krugerrand price shot upwards into an overbought position from which it's likely to ease. Newgold continued the gain that began at the start of October, but it may also ease slightly.
The medium-term outlook for Palamin , remains excellent and, if it breaks through R104,50, the count will be R186.
On super-high volume Digicor has experienced a moving- average crossover and a buy signal in its moving average convergence/divergence plotting. On an encouraging trading update, Reunert has bounced upwards from an oversold position. Reunert has a yet an unfulfilled count to R72 and, if it rises to R59, a new count to R75 can be made.
Even More Charting for Profits, Jean Temkin's latest (3rd) textbook on technical analysis, is now available. She has interests in Newgold and Reunert.
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