Well, another action-packed week...
...with a heap of events, some planned and some not, there was more than enough action to keep everyone interested.
The economic events came thick and fast, and then it was international relations in the spotlight again as the oil price rocketed.
(Not to mention our own personal event: the launch of our Global Market Forecasts for the Euro vs US Dollar, US Dollar Index, Gold vs US Dollar and Bitcoin vs US Dollar. Learn some more here)
Let's get into the meat of this review, as we have a lot ground to cover!
Firstly, our forecast on Friday the 13th of September gave an outline of what to expect over the coming days.
With the Rand having strengthened down to R14.57, there was potential for a little more downside but most likely the market had bottomed out in our target area (14.66-14.40) and was now going to move back up again during the week toward R14.87-15.07...
...if this played out, it was certainly going to be an interesting few days (and our subscribers were ready and waiting for it)
Click to enlargeHere were some of the biggest events from the 5 days:
- US vs Iran - the two nations were squaring off against one another again after major ructions in the Middle East over drone attacks on Saudi Oil Fields.
- Oil Price spike - and as a result, Oil prices spiked as much as 20% on Monday morning, ostensibly due to the huge impact on oil production
- Interest Rates - big calls were made by SARB, US Fed & the BOE this last week on interest rates
- SAA bailout - yet another 'capital injection' is coming for SAA in September...what next for the SOEs?
- Zim's collapse - things are going from bad to worse for SA's neighbours, as interest rates soar and famine fears worsen
To start things off, the market 'gapped' over the weekend and the Rand started 7c weaker to the Dollar at 14.62...
The first news of the week was the Saudi Arabia oil crisis which had developed over the weekend, with Iran suspected and accused of having sent drones in to strike the Saudi oil fields. The missiles fired from these drones caused significant damage and fires raged as a result of the attacks. Oil prices skyrocketed 20% on Monday morning, as the world tried to digest 5% of its global production being affected in one attack.
This did not do any good for US & Iran relations, as the Trump administration came out and called it an "Act of War"...
...and an Iranian official warned of "all-out war" should the US or Saudi Arabia attack.
This left markets on tenterhooks, and US Stocks went for a tumble on the uncertainty of it all.
Thankfully, as the week went on, Oil prices stabilized once again down into the mid $60s with Saudi Arabia returning to normal oil production, after the market had touched $70 to the barrel...funny how Elliott Wave can almost foretell the news...
However, risk-off sentiment as investors like to call it, was back in town, and the Rand continued to lose ground as the week went on:
In fact, by Friday evening, the market had lost all of 40c from the previous week's close, touching R14.98 to the Dollar...
...which perfectly validated our forecast from from Friday the 13th's forecast, with the market firstly bottoming out slap-bang in the R14.66-14.40 area, and then moving up to make a high slap-ban in the middle of the R14.87-15.07 target area.
Another win for Elliott Wave analysis!
In response to our forecasts this last week, here are some comments from our clients:
- Paul Sneeden: "Thank-you for your reply to my mail, answering my questions. You guys are one in a billion. Your forecasts complete my trading system, which is now eventually going smoothly. Your forecasts are incredibly accurate. I wait in anticipation every Wednesday & Friday. My system would simply not work without your forecasts."
- Samson Orimolade: "By the way, i also testify that the Rand predictions have been insanely accurate. Since joining the trial, i have seen significant improvement."
It is truly amazing to see the power of the Elliott Wave Principle!
While far from perfect, its reliability is something we have not found to be challenged by any other system...
... in forecasting any liquid financial market.
And that is why we launched our Global Market Forecast service during this past week to our existing Dynamic Outcomes community with a special clients-only launch, covering 4 global markets under a new website and branding:
- DXY (US Dollar Index)
- EURUSD (Euro vs US Dollar)
- XAUUSD (Gold vs US Dollar)
- BTCUSD (Bitcoin vs US Dollar)
How did it go?
All I can say is, very well! We have had some wonderful take-up, feedback and support.
More information as to this new service can be found here
In other news, here were some other big headlines:
- Interest rates were the order of the week with SARB, US Fed and the BOE needing to make a call on their nation's interest rates. The Fed went ahead first on Wednesday, and as expected there was a rate cut - but of only 0.25% which was not nearly enough to satisfy President Trump who said "Jay Powell and the Federal Reserve Fail Again. No “guts,” no sense, no vision! A terrible communicator!". It was then the turn of the BOE, and they returned to their same old strategy of "wait and see" due to the Brexit uncertainty, leaving rates at 0.75%. Lastly it was the turn of SARB - who also unanimously decided to keep interest rates on hold for now.
- Locally, it was a week of bailouts and loans for government departments, as it was confirmed that SAA would be getting another R5.5bn of capital injection by the end of September. The black hole for getting rid of cash does not seem to ever reach its limit! And then it was the turn of SANRAL, as they got a R7bn loan from BRICS bank in China this last week to improve toll roads. Somewhere along the line, this money is going to have to be repaid...and Communist China gets a firmer grip on Africa...
- Over the border in Zimbabwe was another story, as the SA neighbours are now really suffering, with interest rates having been hiked to 70% to compensate for the dire economy, and the risks of a worst ever famine a harsh reality for locals, as the economy collapsed. According to the United Nations World Food Programme: The worst drought in almost four decades, cyclone-induced floods and an economic collapse have left Zimbabwe on the verge of its worst-ever famine. The southern African nation will probably run out of maize - its staple food - by January and about three out of five Zimbabweans won’t have enough to eat.
A shocking and scary state of affairs, as African leaders continue to spend time on doing something such as honoring the murderous dictator Mugabe, rather than look after their own citizens basic food to survive!
And that was that for the week...although only a fraction of all that happened, such as Fed's comments on repurchase operations flashing warning signs as to the economy!
As for the Rand, it closed out the week around R14.90 to the Dollar as per our forecast, with a lot of USD pressure taking its toll.
The Week Ahead (23-27 Sept 2019) |
Well, as we head into the new week, where next for the Rand?
Our analysis on Friday showed clearly what we thought was most likely to happen.
As far as triggers go, there are a few medium size trigger events, such as:
- SA PPI
- US Goods Trade Balance
- US Durable Goods Orders
But probably more focus will be on global events such as Iran-Saudi Arabia-US relations and Brexit.
But all in all, we expect another volatile week in the markets.
So, how do you manage your exposures?
As you can see from last week, we simply let the market itself provide us with the best guess of what was likely to happen - and it followed through perfectly.
How do we do this?
Through applying the Elliott Wave Principle (the study of human behaviour in financial markets) together with a unique combination of price ratio, momentum and time cycle studies to provide us with an objective view.
And, as you saw in the review above, a forecast like this gives you something that you can use to make objective, informed and actionable decisions. instead of emotionally-charged knew-jerk ones.
Based on our analysis, the next few weeks are likely to take many persons by surprise - please do not be one of them.
To get a look at what we are speaking about, use the link below to see the latest forecast:
(You don't want to regret not having done so this time next week...)
Look forward to hearing from you.
To your success~
James Paynter
