TOP40 chart from Bloomberg.
What a sell off! Only at the eleventh hour they decide that Dubai might be in trouble! Amazing.
The last trade I suggested was to short AGL (and hedge with BIL). For those who rode the trade this week had an interesting time with AGL going up 14 bucks before coming back, and those which hedged had made some good money off the bat. I would normally suggest riding the trade longer but even though the TOP40 has not reached its technical level, the FTSE100 in the UK has! I would suggest taking some off the table here as the risk reward is starts to decrease.
For those which have some risk appetite left after this year’s trading might want to bet on a holiday run, this could be a handsome payoff. I would be looking for the TOP40 to test the top resistance line, hence a nice 1000 point December rally. Start collection some resources, especially gold as she comes off. Just a reminder that this is a high octane trade!
Just to clarify the issue, I am still negative on the fundamentals but hate to fight the influx of money into South Africa and the weakening USD. So long as the USD weakens money is coming to SA and the commodities will run! Especially gold!
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