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


BullishBullish

SupportSupport

Platinum-$

SupportSupport

SupportSupport



BullishBullish

Silver-$

BullishBullish


SupportSupport

SupportSupport


SupportSupport

Copper-$

BearishBearish


SupportSupport

SupportSupport

SupportSupport

SupportSupport


US$ vs Euro

$ Weakness / Euro Strength$ Weakness / Euro Strength

$ Strength / Euro Weakness$ Strength / Euro Weakness

SupportSupport


US$ weaknessUS$ weakness


US$ vs GBP

$ Strength / GBP Weakness$ Strength / GBP Weakness

$ Weakness / GBP Strength$ Weakness / GBP Strength


SupportSupportSupportSupport

US$ weaknessUS$ weakness

JPY vs US$

JPY Weakness/ $ StrengthJPY Weakness/ $ Strength

JPY Strength / $ WeaknessJPY Strength / $ Weakness


SupportSupport

JPY StrengthJPY Strength


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


-16.3%

Head & Shoulders?

LS

Head

RS

Neckline

Target Price

DJ Industrial Average (Monthly)

S&P 500 Index

SupportSupport

SupportSupport

BearishBearish


-17.8%

Nikkei Index

BearishBearish

SupportSupport



-20.56%

Hang Seng Index


BearishBearish

SupportSupport

SupportSupport-22.29%

DAX Index

ResistanceResistanceSupportSupport

SupportSupport


SupportSupport

BearishBearish

-27.02%

CAC 40 Index


SupportSupport


BearishBearish

SupportSupport

-27.65%

FTSE 100 Index


SupportSupport

SupportSupport


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



68.24%

NewGold (GLD)

SupportSupport

SupportSupport

BullishBullish


67.68%

Platinum Rand


SupportSupportSupportSupport

BullishBullish


Rand vs US $

Rand Strength / US$ Weakness Rand Strength / US$ Weakness

Rand WeaknessRand Weakness

Rand Weakness/ US$ StrengthRand Weakness/ US$ Strength



SupportSupport

SupportSupport


Rand vs Euro

Rand Strength / Euro WeaknessRand Strength / Euro Weakness

Rand Weakness/ Euro StrengthRand Weakness/ Euro Strength


SupportSupport


SupportSupport


SupportSupport

66% Retracement66% Retracement

Rand vs GBPRand Weakness/ GBP StrengthRand Weakness/ GBP Strength

Rand Strength/ GBP WeaknessRand Strength/ GBP Weakness

SupportSupport


SupportSupport



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


Bullish / NeutralBullish / Neutral

SupportSupport

SupportSupport

JSE Overall Index

SupportSupport


SupportSupport

SupportSupport

BearishBearish

Top 40 Index


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


Retest Resistance?Retest Resistance?

Industrial 25 IndexIndustrial 25 Index

Bearish (Just!) / Overbought / OutperformingBearish (Just!) / Overbought / Outperforming


Industrial Shares – MTN Group

Hold



Industrial Shares – BATS

Sell on

Break


Bearish DivergenceBearish Divergence

Industrial Shares – SAB Miller

Hold

Bullish / Overbought / OutperformingBullish / Overbought / Outperforming

Industrial Shares – Industrial Shares – RichemontRichemont

Sell on

Break


Industrial Shares – Industrial Shares – Bidvest

Sell on

Break


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!

Thank YouThank [email protected]

(011) 996 5200(011) 996 5200

mailto:[email protected]

Money Matters Shaun van den Berg 30 August 2011. Top - Down Approach ` International...

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