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Transcript of Money Matters Shaun van den Berg 30 August 2011. Top - Down Approach ` International...
Money Matters
Shaun van den Berg
30 August 2011
Top - Down Approach
`
• International MarketsInternational Markets• Economic IndicatorsEconomic Indicators• CurrenciesCurrencies• Precious MetalsPrecious Metals• Local MarketLocal Market• Main IndicesMain Indices• Specific SectorsSpecific Sectors• Specific SharesSpecific Shares
Market Summary
International Outlook• Brent Crude Oil• Gold-$ & Platinum-$• Silver $ & Copper• US$ versus Euro & GBP• JPY versus US$
• DJ Industrial Average • S & P 500 Index• Nikkei Index• Hang Seng Index• DAX Index• CAC 40 Index • FTSE Index
Local OutlookGold RandPlatinum RandRand vs US $ & Euro
JSE Overall IndexTop 40 IndexMid Cap & Small Cap Index Alt-X IndexGold & Platinum Mining IndexResource 20 IndexFinancial 15 IndexIndustrial 25 IndexSummary Conclusion
Technical Market Overview
Economic Indicators
• Brent Crude Oil• Gold-$• Platinum-$• US$ versus Euro • US$ versus GBP• JPY versus US$
Brent Crude Oil
BullishBullish
Gold-$
SupportSupport
SupportSupport
ResistanceResistance
ResistanceResistance
BullishBullish
SupportSupport
Platinum-$
SupportSupport
SupportSupport
ResistanceResistance
ResistanceResistance
BullishBullish
Silver-$
BullishBullish
ResistanceResistance
SupportSupport
SupportSupport
ResistanceResistance
SupportSupport
Copper-$
BearishBearish
ResistanceResistance
SupportSupport
SupportSupport
SupportSupport
SupportSupport
ResistanceResistance
US$ vs Euro
$ Weakness / Euro Strength$ Weakness / Euro Strength
$ Strength / Euro Weakness$ Strength / Euro Weakness
SupportSupport
ResistanceResistance
US$ weaknessUS$ weakness
ResistanceResistance
US$ vs GBP
$ Strength / GBP Weakness$ Strength / GBP Weakness
$ Weakness / GBP Strength$ Weakness / GBP Strength
ResistanceResistance
SupportSupportSupportSupport
US$ weaknessUS$ weakness
JPY vs US$
JPY Weakness/ $ StrengthJPY Weakness/ $ Strength
JPY Strength / $ WeaknessJPY Strength / $ Weakness
ResistanceResistance
SupportSupport
JPY StrengthJPY Strength
ResistanceResistance
SupportSupport
Bond Yield CurveWhat does Yield Curve mean?
• A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity dates.
• The most frequently reported yield curve compares the three-month, two-year, five-year and 30-year U.S. Treasury debt.
• This yield curve is used as a benchmark for other debt in the market, such as mortgage rates or bank lending rates.
• The curve is also used to predict changes in economic output and growth.
Bond Yield Curve• The shape of the yield curve is closely scrutinised because it
helps to give an idea of future interest rate change and economic activity.
• There are three main types of yield curve shapes: normal, inverted and flat (or humped).
– A normal yield curve (pictured above) is one in which longer maturity bonds have a higher yield compared to shorter-term bonds due to the risks associated with time.
– An inverted yield curve is one in which the shorter-term yields are higher than the longer-term yields, which can be a sign of upcoming recession.
– A flat (or humped) yield curve is one in which the shorter- and longer-term yields are very close to each other, which is also a predictor of an economic transition.
• The slope of the yield curve is also seen as important: the greater the slope, the greater the gap between short- and long-term rates.
What can we learn? • Brent Crude oil price Brent Crude oil price
– BullishBullish• Precious Metals Precious Metals
– Gold $: BullishGold $: Bullish– Platinum-$: BullishPlatinum-$: Bullish– Silver: BullishSilver: Bullish– Copper: Bearish Copper: Bearish
• US DollarUS Dollar– Weakening Weakening – Testing support against the Euro Testing support against the Euro
Bullish
Bullish
US$US$WeaknessWeakness
International Markets
• DJ Industrial Average • S & P 500 Index
• Nikkei Index• Hang Seng Index
• DAX Index• CAC 40 Index • FTSE Index
DJ Industrial Average
BearishBearish
SupportSupport
SupportSupport
ResistanceResistance
-16.3%
Head & Shoulders?
LS
Head
RS
Neckline
Target Price
DJ Industrial Average (Monthly)
S&P 500 Index
SupportSupport
SupportSupport
BearishBearish
ResistanceResistance
-17.8%
Nikkei Index
BearishBearish
SupportSupport
ResistanceResistance
ResistanceResistance
-20.56%
Hang Seng Index
ResistanceResistance
BearishBearish
SupportSupport
SupportSupport-22.29%
DAX Index
ResistanceResistanceSupportSupport
SupportSupport
ResistanceResistance
SupportSupport
BearishBearish
-27.02%
CAC 40 Index
ResistanceResistance
SupportSupport
ResistanceResistance
BearishBearish
SupportSupport
-27.65%
FTSE 100 Index
ResistanceResistance
SupportSupport
SupportSupport
ResistanceResistance
BearishBearish
SupportSupport
-17.8%
What can we learn? • US MarketsUS Markets
– DJIA: Bearish (-16.3%)DJIA: Bearish (-16.3%)– S&P 500: Bearish (-17.8%)S&P 500: Bearish (-17.8%)
• Asian Markets Asian Markets – Nikkei Index: Bearish (-20.56%)Nikkei Index: Bearish (-20.56%)– Hang Seng Index: Bearish (-22.29%)Hang Seng Index: Bearish (-22.29%)
• European MarketsEuropean Markets– DAX Index: Bearish (27.02%)DAX Index: Bearish (27.02%)– CAC 40 Index: Bearish (-27.65%)CAC 40 Index: Bearish (-27.65%)– FT100 Index: Bearish (-17.8%) FT100 Index: Bearish (-17.8%)
Bearish
Bearish
Local Market
• Gold Rand• Platinum Rand• Rand vs US $• Rand vs Euro• Rand vs GBP
• JSE Overall Index• Top 40 Index• Mid Cap Index• Small Cap Index • Alt-X Index
• Gold Mining Index• Platinum Mining Index• Resource 20 Index• Financial 15 Index• Industrial 25 Index
Gold Rand
SupportSupport
SupportSupport
BullishBullish
ResistanceResistance
ResistanceResistance
68.24%
NewGold (GLD)
SupportSupport
SupportSupport
BullishBullish
ResistanceResistance
67.68%
Platinum Rand
ResistanceResistance
SupportSupportSupportSupport
BullishBullish
ResistanceResistance
Rand vs US $
Rand Strength / US$ Weakness Rand Strength / US$ Weakness
Rand WeaknessRand Weakness
Rand Weakness/ US$ StrengthRand Weakness/ US$ Strength
ResistanceResistance
ResistanceResistance
SupportSupport
SupportSupport
ResistanceResistance
Rand vs Euro
Rand Strength / Euro WeaknessRand Strength / Euro Weakness
Rand Weakness/ Euro StrengthRand Weakness/ Euro Strength
Rand WeaknessRand Weakness
SupportSupport
ResistanceResistance
SupportSupport
ResistanceResistance
SupportSupport
66% Retracement66% Retracement
Rand vs GBPRand Weakness/ GBP StrengthRand Weakness/ GBP Strength
Rand Strength/ GBP WeaknessRand Strength/ GBP Weakness
SupportSupport
ResistanceResistance
SupportSupport
ResistanceResistance
Rand WeaknessRand Weakness
What can we learn?
• Gold Rand: Gold Rand: Bullish (Overbought) - NewGold ETF?Bullish (Overbought) - NewGold ETF?
• Platinum Rand: Platinum Rand: Bullish (Overbought)Bullish (Overbought)
• Rand weakness vs USD vs EUR vs GBP Rand weakness vs USD vs EUR vs GBP • Rand Hedge Shares?Rand Hedge Shares?• Opportunities?Opportunities?
Market Indicators
• JSE Overall IndexJSE Overall Index• Top 40 IndexTop 40 Index• Mid Cap Mid Cap • Small CapSmall Cap• Alt-X IndexAlt-X Index
• Gold Mining Index Gold Mining Index • Platinum MiningPlatinum Mining• Resource 20 IndexResource 20 Index• Financial 15 IndexFinancial 15 Index• Industrial 25 IndexIndustrial 25 Index
JSE Overall Index (Weekly)
SupportSupport
ResistanceResistance
Bullish / NeutralBullish / Neutral
SupportSupport
SupportSupport
JSE Overall Index
SupportSupport
ResistanceResistance
SupportSupport
SupportSupport
BearishBearish
Top 40 Index
ResistanceResistance
SupportSupport
SupportSupport
SupportSupport
BearishBearish
Top 40 Index
Bearish / Oversold / Market PerformingBearish / Oversold / Market Performing
Mid Cap IndexMid Cap Index
Bearish / Oversold / OutperformingBearish / Oversold / Outperforming
Small Cap Index
Bearish / Oversold / UnderperformingBearish / Oversold / Underperforming
Fledgling Index
Bearish / Oversold / UnderperformingBearish / Oversold / Underperforming
Alt-X Index
Bullish / Oversold / UnderperformingBullish / Oversold / Underperforming
What can we learn? • JSE Overall Index JSE Overall Index
– Bullish/ Neutral(W) Bullish/ Neutral(W) – Bearish Bearish – Testing Resistance Testing Resistance
• Top 40 Index Top 40 Index – Bearish / OversoldBearish / Oversold– Market Performing Market Performing
• Mid Cap Index Mid Cap Index – Bearish / OversoldBearish / Oversold– Market Outperform Market Outperform
• Small Cap IndexSmall Cap Index– Bearish / OversoldBearish / Oversold– Market Underperform Market Underperform
• Fledgling IndexFledgling Index– Bearish / OversoldBearish / Oversold– UnderperformingUnderperforming
• Alt-X IndexAlt-X Index– Bullish / OversoldBullish / Oversold– Underperforming Underperforming
Bearish
Bearish
Market Indicators
• JSE Overall IndexJSE Overall Index• Top 40 IndexTop 40 Index• Mid Cap Mid Cap • Small CapSmall Cap• Alt-X IndexAlt-X Index
• Gold Mining Index Gold Mining Index • Platinum MiningPlatinum Mining• Resource 20 IndexResource 20 Index• Financial 15 IndexFinancial 15 Index• Industrial 25 IndexIndustrial 25 Index
Gold Mining Index
Bullish (Just!) / Overbought / OutperformingBullish (Just!) / Overbought / Outperforming
Bearish DivergenceBearish Divergence
Gold Shares – Anglogold
Watch
Bullish (Just!) / Overbought / UnderperformingBullish (Just!) / Overbought / Underperforming
Gold Shares – Harmony
Watch
Bullish / Oversold / UnderperformingBullish / Oversold / Underperforming
Gold Shares – Gold Fields
Bullish / Overbought / OutperformingBullish / Overbought / Outperforming
Watch
Platinum Mining Index
Bearish / Overbought / UnderperformingBearish / Overbought / Underperforming
Watch
Platinum Shares –AmplatsPlatinum Shares –Amplats
Bearish / Overbought / Market PerformingBearish / Overbought / Market Performing
Watch
Platinum Shares – Implats
Bearish / Overbought/ OutperformingBearish / Overbought/ Outperforming
WatchClosely
Resources 20 IndexResources 20 Index
Bearish/ Overbought / UnderperformingBearish/ Overbought / Underperforming
Watch
Resource Shares – Anglo
Bearish/ Oversold / UnderperformingBearish/ Oversold / Underperforming
Watch
Resources – BHP Billiton
Bearish/ Overbought / Market PerformingBearish/ Overbought / Market Performing
Watch
Resource Shares – Sasol
Bearish/ Oversold / Market PerformingBearish/ Oversold / Market Performing
50% Retracement level50% Retracement level
WatchClosely
Resource Shares – Exxaro
Bullish/ Oversold / OutperformingBullish/ Oversold / Outperforming
Hold
Test July’s High?Test July’s High?
Resource Shares – Kumba
Bullish (Just!) / Oversold / OutperformingBullish (Just!) / Oversold / Outperforming
WatchClosely
Summary – Mining & Resources
• Gold Mining IndexGold Mining Index– Bullish (Just!)Bullish (Just!)– OverboughtOverbought– OutperformingOutperforming– Bearish DivergenceBearish Divergence
• Platinum MiningPlatinum Mining– BearishBearish– OversoldOversold– UnderperformingUnderperforming– Testing ResistanceTesting Resistance
• Resource 20 Index Resource 20 Index – Bearish Bearish – OverboughtOverbought– UnderperformingUnderperforming– Testing ResistanceTesting Resistance
Harmony – Some more upside potentialImplats – Breakout above Resistance?Sasol – Bouncing off SupportExxaro – Hold (Test July’s Highs?)Kumba – Testing Resistance/ Oversold
Financial 15 Index
Bearish/ Overbought/ Market OutperformingBearish/ Overbought/ Market Outperforming
WatchClosely
Bank Shares - ABSA
Bullish (Just!) / Overbought/ OutperformingBullish (Just!) / Overbought/ Outperforming
WatchClosely
Bank Shares – Firstrand
WatchClosel
y
Bullish (Just!) / Overbought/ OutperformingBullish (Just!) / Overbought/ Outperforming
Bank Shares – Stanbank
WatchClosel
y
Bearish/ Overbought / Market UnderperformBearish/ Overbought / Market Underperform
Down ChannelDown Channel
Bank Shares – Nedbank
Bullish/ Overbought / OutperformingBullish/ Overbought / Outperforming
WatchClosel
y
Life Assurance - Sanlam
Bearish / Overbought / Market PerformingBearish / Overbought / Market Performing
Watch
Life Assurance– Old Mutual
Bearish / Overbought / UnderperformingBearish / Overbought / Underperforming
Real Estate - Growthpoint
Hold
Bullish/ Overbought / Market OutperformingBullish/ Overbought / Market Outperforming
Testing Resistance?Testing Resistance?
Real Estate - RedefineReal Estate - Redefine
Hold
Bullish/ Overbought / OutperformingBullish/ Overbought / Outperforming
Retest Resistance?Retest Resistance?
Industrial 25 IndexIndustrial 25 Index
Bearish (Just!) / Overbought / OutperformingBearish (Just!) / Overbought / Outperforming
Retest Resistance?Retest Resistance?
Industrial Shares – MTN Group
Hold
Bullish/ Overbought / OutperformingBullish/ Overbought / Outperforming
Retest Resistance?Retest Resistance?
Industrial Shares – BATS
Sell on
Break
Bullish/ Overbought / OutperformingBullish/ Overbought / Outperforming
Bearish DivergenceBearish Divergence
Industrial Shares – SAB Miller
Hold
Bullish / Overbought / OutperformingBullish / Overbought / Outperforming
Industrial Shares – Industrial Shares – RichemontRichemont
Sell on
Break
Bearish/ Oversold / UnderperformingBearish/ Oversold / Underperforming
Industrial Shares – Industrial Shares – Bidvest
Sell on
Break
Bearish/ Oversold / UnderperformingBearish/ Oversold / Underperforming
Summary – Financial & Industrial
• Financial 15 IndexFinancial 15 Index– BearishBearish– OverboughtOverbought– Market Outperforming Market Outperforming
• Banking SharesBanking Shares– BullishBullish– OverboughtOverbought– OutperformingOutperforming
• Life Assurance SharesLife Assurance Shares– Bearish Bearish – OverboughtOverbought– UnderperformingUnderperforming
• Real Estate SharesReal Estate Shares– Bullish Bullish – OverboughtOverbought– OutperformingOutperforming
• Industrial 25 IndexIndustrial 25 Index– BearishBearish– OverboughtOverbought– OutperformingOutperforming
Summary – Financial & Industrial • Banks
– ABSA, Firstrand & Nedbank
• Bullish
• Testing resistance
– Stanbank
• Bearish
• Breakout of Down Channel?
• Life Assurance
– Old Mutual
• Breakout above resistance?
• Real Estate
– Growthpoint & Redefine
• Retesting Resistance
• Industrials
– MTN Group (Hold)
• Retesting Resistance
– BATS (Sell on Breakout)
• Overbought
• Bearish Divergence
– SAB Miller (Hold)
• New Highs
– Richemont (Sell on Breakout)
• Testing Support level
– Bidvest (Sell on Breakout)
• Testing Support Trend Line
Callie’s Choice for this month
Comment on Results
Operational Overview
Prospects & Recommendation
Ciplamed (Weekly)
Ciplamed
Bearish/ Overbought / Market PerformingBearish/ Overbought / Market Performing
Conclusion
• Simple Trend Analysis– Price Action– Support & Resistance – Overbought / Oversold & Relative Strength
• Money Matters presentation available soon!• Next Meeting: Tuesday, 27 September 2011• Good Luck • Happy Trading!