DOW SET FOR A PULLBACK
Investor confidence has picked a bit since the mid December selloff of US stocks, as the Dow Jones Industrial Average has moved over 800 points from a low of 17 200. On the 18 of December I wrote that the Dow will reach 18 000 before year end and the S&P will reach 2075 to 2100, also before year end. Since then, both my predictions have come to pass and now I see a different story now. I recommend that you read my previous posts, look at the historical charts, compare my posts against the charts, and you will see how accurate these predictions have been.
My reason for starting this blog was to share with people my talent, the ability to read into the future of the financial markets, something I view as an easy way to make money. I have followed stocks for years first as a hobby, then as a personal business, but I have since realised that there is a huge potential to help other people make money in the markets.
My methods are a mix of fundamental, technical and behavioral finance principles. However, I do not force myself to stick to the rigid rules of technical analysis or even the common sence of fundamental analysis. My method is not scientifically proven but has been historically correct. I do not claim that all of my predictions will come true but I can guarantee long term profitability by following this blog.
WHO CAN PROFIT FROM MY BLOG
Any trader who trades in the exchanges or any direvatives trader who trades in CFDs or a spread-bettor. Those who have followed me since the start of this blog have not had a single loosing trade under my suggestion, therefore, this blog is not bolony but the real thing. If you do not believe me, start following my blog everyday, and you will see winning trades being recommended to you, right before your eyes. Then you will tell everybody else you know so that they also may profit from this blog. Now back to the Dow.
DOW TO SELL-OFF THIS JANUARY.
This December rally of the Dow was caused by the Fed's language that interest rates will not raise anytime soon. US GDP figure for the quater came at an impressive 5%. Traders mysticaly believed in a so called Santa rally that occurs right after Christmas up to the new year. I noticed that this Santa rally did not actually occur as it did last year. This past week's rally has been a seemingly tired one with the Dow only gaining a bit over 200 points since December 22. The index seemed to float all the way up from 17 800 to over 18000 points, my target for the month. Remember the same thing happened last month when the Dow floated around the 17 800 figure before selling off.
Last week's action tells me that investors are fully in the market, not selling, and at the same same time not buying much. The upward movement is caused by the nibbling buyers who are not faced with a group of strong sellers because everyone believes the market is going higher.
ENTER JANUARY
Investor fatigue will begin to weigh in on traders and investors alike as they will not see a further spectacular rise in the Dow, say, to something like 18 500 in a week's time. Not seeing this will cause a number of them to take profits in order to look for other emerging oppotunities elsewhere. This will be the beginning of the avalanche as more and more traders and investors join in the sell off. Investment managers and hedge funds seeking to re-balance their books will sale their holdings for that year end bonus calculation, also adding fuel to the sale-off. I predict that the January sell-off will bring the Dow below 17 000, maybe 16 500, or at most 16 200, where it is most likely to find its floor.
When this will happen exactly no one knows but it will not take over six weeks for this sell off to begin. Something above 5% to 10% correction. After that then, they will be another quick rally bring the Dow again to its all time high above 18 000, around March 2015.
As a trader, I would short the Dow or the S&P with a stop loss of 200 points for the Dow and 20 points for the S&P. Say you short the Dow now at 18 038, if the rally continues, you exit the trade at 18 238, which is a loss of 200 points. Do not change the trade to long but let the rally continue until you see a 150 point reversal, then enter again your short with a 200 point stop loss again. If you loose, repeat the above system until this sell off I speak of takes place.
Look at it this way, if you get two loosing trades totaling 400 points, you will be compensated by the 1 500 point reversal in the coming sell off. Also, keep reading my blog for updates, for as we all know, financial markets change like the Cape Town weather, therefore, one has to be updated periodically.
Trade well, trade profitably
by Nqobani Zondo
Tuesday 30 December 2014
Monday 29 December 2014
OIL HAS FOUND A FLOOR
The ICE Brent Crude oil price has been hovering around the $60 mark, as I said in the previous post. My prediction has been true for these past weeks and I believe it will continue that way. In my previous post , I predicted a fall in the oil price should it advance a bit over the $60 dollar mark. On the 22 of December, ICE oil almost touched the $62 dollar mark on the intra-day chart and dropped below $60 today, on the 29 of December. At this point we are in the mid trading range, therefore a buy would be anything below or around $58 and a short anything around $62 or $63. Traders should be careful not to just get into these trades merely because prices touched these support and resistance levels but must wait for a turnaround, in whichever direction.
This range, I suspect would prevail for at least the first six months of 2015 before prices pck up again, but will not quickly rise to the normal $100 mark.
The ICE Brent Crude oil price has been hovering around the $60 mark, as I said in the previous post. My prediction has been true for these past weeks and I believe it will continue that way. In my previous post , I predicted a fall in the oil price should it advance a bit over the $60 dollar mark. On the 22 of December, ICE oil almost touched the $62 dollar mark on the intra-day chart and dropped below $60 today, on the 29 of December. At this point we are in the mid trading range, therefore a buy would be anything below or around $58 and a short anything around $62 or $63. Traders should be careful not to just get into these trades merely because prices touched these support and resistance levels but must wait for a turnaround, in whichever direction.
This range, I suspect would prevail for at least the first six months of 2015 before prices pck up again, but will not quickly rise to the normal $100 mark.
Monday 22 December 2014
Market Update
Since my last post [18 December], the Dow Jones has, as predicted edged towards my 18 000 point target, just 200 points away. This is a 600 point profit so far. If you are a trader and have missed this profitably oppotunity, it might not be too late as i see a further upswing for the rest of the year. However at this point index traders should be very carefull not to be over confident on a market that has rallied to an overstratced level. The S&P has also rallied over a 100 points, also posting a great profit for the week. Taking half off the table at this juncture would be a wise idea combined with a stop loss of 20 point retracement.
oil prices have bounced with the WTI trading above $62. My expectations for oil prices is still a range between $55 and $65. Any extension of oil prices for now would be followed by a profit taking sell off, but do not expect anything below the $50 mark.
Since my last post [18 December], the Dow Jones has, as predicted edged towards my 18 000 point target, just 200 points away. This is a 600 point profit so far. If you are a trader and have missed this profitably oppotunity, it might not be too late as i see a further upswing for the rest of the year. However at this point index traders should be very carefull not to be over confident on a market that has rallied to an overstratced level. The S&P has also rallied over a 100 points, also posting a great profit for the week. Taking half off the table at this juncture would be a wise idea combined with a stop loss of 20 point retracement.
oil prices have bounced with the WTI trading above $62. My expectations for oil prices is still a range between $55 and $65. Any extension of oil prices for now would be followed by a profit taking sell off, but do not expect anything below the $50 mark.
Thursday 18 December 2014
Welcome to the Zondo Financial Markets blog were we discuss all things relating to the global financial markets in a bid to make profit for all our readers. I have been moved to create this blog so that I can be able to share my own inputs as far as stock picking and economic direction is concerned.
I write this at the last week before Christmas and with the Dow Jones having shed 4% and seems to have bottomed. I believe we will see a late December rally that will see the Dow above 18 000 before year end. I also predict the S&P will reach 2075 or 2100 by the end of the year. The next sell off might take place anytime from now, even before the year end.
Investors are not sure if oil prices have bottomed, but I do not see them going down to $45. That $60 mark should be the oil bottom and I predict oil will remain low for a considerable amount of time. Therefore I'm neutral on oil prices for now, neither shorting oil or going long.
With that said, low oil prices will keep the Fed away from raising rates anytime soon as the lower oil prices delays the Fed's 2% inflation target. Stabilized oil prices will also end the bloodbath on a fearful market that sees prices too low as bad for the banking industry that supports oil producers in the United States. I do not see oil prices going further south therefore I do not have those fears. I'd buy bank stocks should they sell off due to those reasons.
If therefore, oil prices remain subdued for the first half of 2015, then corporate profits will sour due to less inputs costs related to energy. That will send the major American indecies to further highs and helps keep this bull market intact and strong.
I do not subscribe to the calls of an impending market crash, however I do recognize the deteriorating fundamentals like deflationary pressures, Russian problems spilling over, corporates not making real investments that generate real growth. In my view, those concerns it seems are no longer left at the mercy of free markets dynamics but are now subjected to Central Banks and governmental interventions. In this era, Central Banks are ever protective of the financial markets as they have seen, through the 2008 global market crash, how a sudden bear market can cripple many sectors of the economy and society in an ugly manner.
Janet Yellen will save the NYSE for a considerable amount of time, but even she can only do so much. Then maybe in the quite distant future will we see the whole castle thats build on air crushing down like storm. Only then, only then, but not now. We look safe at least for the next two to five years. Corrections will be many along the way but a full market crush is not in the near horizon.
That is it for today, we will take a look at other interesting ideas and markets latter.
by nqobani zondo
nqozondo@gmail.com
I write this at the last week before Christmas and with the Dow Jones having shed 4% and seems to have bottomed. I believe we will see a late December rally that will see the Dow above 18 000 before year end. I also predict the S&P will reach 2075 or 2100 by the end of the year. The next sell off might take place anytime from now, even before the year end.
Investors are not sure if oil prices have bottomed, but I do not see them going down to $45. That $60 mark should be the oil bottom and I predict oil will remain low for a considerable amount of time. Therefore I'm neutral on oil prices for now, neither shorting oil or going long.
With that said, low oil prices will keep the Fed away from raising rates anytime soon as the lower oil prices delays the Fed's 2% inflation target. Stabilized oil prices will also end the bloodbath on a fearful market that sees prices too low as bad for the banking industry that supports oil producers in the United States. I do not see oil prices going further south therefore I do not have those fears. I'd buy bank stocks should they sell off due to those reasons.
If therefore, oil prices remain subdued for the first half of 2015, then corporate profits will sour due to less inputs costs related to energy. That will send the major American indecies to further highs and helps keep this bull market intact and strong.
I do not subscribe to the calls of an impending market crash, however I do recognize the deteriorating fundamentals like deflationary pressures, Russian problems spilling over, corporates not making real investments that generate real growth. In my view, those concerns it seems are no longer left at the mercy of free markets dynamics but are now subjected to Central Banks and governmental interventions. In this era, Central Banks are ever protective of the financial markets as they have seen, through the 2008 global market crash, how a sudden bear market can cripple many sectors of the economy and society in an ugly manner.
Janet Yellen will save the NYSE for a considerable amount of time, but even she can only do so much. Then maybe in the quite distant future will we see the whole castle thats build on air crushing down like storm. Only then, only then, but not now. We look safe at least for the next two to five years. Corrections will be many along the way but a full market crush is not in the near horizon.
That is it for today, we will take a look at other interesting ideas and markets latter.
by nqobani zondo
nqozondo@gmail.com
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