The rand/share market seesaw continues, but the gaps, low rand value and JSE Overall high are closing together. This has happened twice before since the rand began losing value against the dollar in July 2011, and on those occasions the currency clawed back some of its losses. I am expecting it to do something similar this time, something we desperately need.
On January 31, both the rand and the JSE-Overall index broke upward through their standard error channels, showing that both had reached an unsustainable level – the index too high and the rand too low. If I had been a trader, the chart would have prompted me to swap dollars for rands and cash in some shares.
I am a placid equity investor, not a trader and so do nothing but smile as I watch the market ease slightly, perhaps pulling back to the 43714 equilibrium. I am content as my charts tell me that a correction is overdue, and once over, the gain will continue.
As predicted the next day the market eases a little while the rand gains a US cent or two. Things don’t always happen that quickly, but it does explain why traders rely on charts to help them turn their cash piles into cash mountains.
The pity is that the private stock market investor, those without the ability to read charts for themselves, are no longer easily able to access the kinds of columns that Ben and I used to write for newspapers and financial magazines. The costs of paper, printing and the rest, far outweighs internet costs, hence the near demise of financial publications, forcing them to cut staff levels to the bone. Then there is the immediacy factor of the internet compared with the delay of printing – why buy a newspaper telling you what happened yesterday when your computer screen can tell you what happened five minutes ago? The pity is that none of the financial websites I’ve viewed produce meaningful charts (technical analysis), the kind I produced for newspapers.
What to do? All I can presently suggest is that you learn to read the excellent charts that can be downloaded from the various services available. My personal choice are the programs offered by Progress Data Services (011 622 6767) as the technical books I have written are based on these programs. My last book, Even More Charting for Profit is out of print, but can be accessed on Amazon Kindle which is easily accessed from our website www.temkinbooks.com. However if there is a particular financial subject or piece of technical analysis you would like to discuss, we’ll be happy to write a blog on the subject.