Over the weekend I turned 47. This is not a great milestone, granted, but the events of the past year or so have been enough to get this humble Glasgow born lad as close as one gets to being philosophical… Indeed, a very direct but also very polite direct message on Twitter to me from the man who goes by the name of “the Market Sniper” got me thinking about Twitter and social media. Call me old-fashioned , but I believe that social media should only be used for positive/constructive purposes, or not used at all (somewhat lost on Mr Dave Robertson / Miss Daytrader / Luke Vaughan and his multitude other aliases). This is a variation on, “if you have nothing pleasant to say don’t say anything at all.”
Despite his nickname, the Market Sniper aka Francis Hunt clearly is a gentleman, and he praised my comments regarding bond yields in Zak Was The Week That Was – our new weekly email send to our subscribers (if you’re not a subscriber then make sure you subscribe on the top right to ensure you receive this each weekend in which I go over the events of the last week, look forward to the next and also offer a “best idea”). The Market Sniper also asked me for a view on Dollar / Yen. In fact, going into the beginning of last month it did appear that the Japanese currency was preparing to begin a topping out process after the massive bull run since the end of last year from the ¥80 level. However, despite the ragged price action of recent weeks, it would appear that this market is delivering nothing worse than a holding pattern while the 200 day moving average currently at ¥95.21 plays catch up.
This, along with the way that we have an RSI uptrend line in place since the beginning of last month, and a benign reading for the oscillator at 56, suggests that if you were planning to do anything now that you would in fact be buying on dips; at least while the June uptrend line at ¥97.5 remains in place as support. Therefore, we are now looking towards the top of the recent range above ¥101 as a potential target to start the autumn. Even though this is a continuation pattern that we see here, it is too early to get excited about what the upside will be by the end of the year.
In fact, what I forgot to mention in my weekly article is the way that our central bankers have got themselves into the King Canute position over interest rates. This is in much the same way that the John Major Government made a fool of itself over the ERM in 1992. Shorting the pound made George Soros over $1 billion back then – a nice days work by anybody’s stretch..! I wonder how much money will be made by those trading against the foolhardy Forward Guidance policy which is perhaps as close as possible to the metaphor of something not being worth the paper it is printed on? !
“Don’t get mad, get even” is one of the better sayings in life – especially from the perspective of someone fast approaching 50. In the case of mining giant Kazakhmys (KAZ) it could very well be that those who had their fingers burned on the way down may be able to recoup not only what they have lost, but make a little more on top. This is said in the wake of the June to August triple bottom for the shares below £2.50 followed by the August flag formation well above July resistance and former April support at £2.91.
The rise for the shares into the flag from the August low to the August peak was some 70p, and we would expect to see a fresh leg to the upside from the flag floor near 300p to an implied £3.70 target. The good news here today is the way that the week has begun with a break through the top of the flag at £3.15. Just in case this is not enough, we have a rising June trend line in the RSI window, as well as support from the 20 day moving average at 307p. Indeed, fussy traders may wish to use the 20 day line as the end of day close stop loss.