Geopolitical uncertainty send stocks lower .... JSE breaks

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Derek  23 May 2018


We are back to uncertainty over trade policy and other geopolitical issues. In late trading all markets in the US closed close to their lows of the day.

All indices negative in the East following the US lower this morning.

I show the Nikkei that broke its trend line this morning after a very long positive trend. Notice that the break down came after it touched strong resistance. FrontRunner, EMA8, MACD and trend line broken .... this is very negative for the Nikkei.

Some shares still moved stronger, but notice the long leg doji of Micron Technology against resistance. The doji also shows uncertainty at this level.

JSE Technical:
The JSE was not following world markets previously and then some breaks came yesterday. The Resources corrected and most of the other shares made a positive move. I do not like it when markets do not move together .... very confusing.

Lets show some of the breaks and corrections. I showed Pick n Pay stores two days ago that were close to support. It then corrected one day more to break up yesterday. Notice how oversold the HeatMaps were on support.

Similar situation for KAP. Not one of my great favourites as it has a slight smell of Steinhoff and a yellow trend factor.

The banks did similar moves, but lets show one of the resources that started making a correction. Sasol closed well below the previous days high. Although no trend lines have been broken, it is in overbough territoty as can be seen on the HeatMaps (first 2 colour bars below chart).

Because I was asked quite a few times about Dis-Chem the past few days, I will discuss the chart. Front Runner predicted a futher low coming when it dipped below the bottom 3 green lines. Now it is making the predicted low, but with divergence. Divergence usually show that a turn is close. a Bullish candle will alert a turn. If you held this share all the way to where it is now, I will hold as the next support is at 2695. People were also alerted to the fact the the trend factor turned red. We will keep an eye on this one.

Your guess is as good as mine with world market uncertainties what the JSE will do today? When uncertain .... stay with the signals.

Enjoy your day.
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