Gapex Morning Gut Feel Report 29th of November

1. ANC/NEC vote of no confidence
2. ZAR not following fundementals
3. JZ stalling the decision

ZAR remains strong amid all the in house fighting in the ANC with NEC taking vote on getting JZ to step down. He will not willingly do this as rumours hit the market that there may be some NEC members resigning and who knows they may join opposition. The political situation will keep the ZAR under extreme pressure and will weaken significantly. Once again, the ZAR is not following the fundamentals but instead the constant political turmoil in SA. How good is it if JZ remains to the detriment of the ANC or does he go, has the ANC between a rock and a hard place? One cannot turn or remain optimistic on the ZAR until all sorted and dust has settled. Taking to traders they are remaining small long of dollars. This irrational decision of the ANC/NEC must surely give rise to a ratings downgrade by S&P. Economists are divided as to what he will do, but there is a stronger bias to JZ remaining for his term at the detriment of the ruling party. Trading range 13.70-14.20.

USD/ZAR Hourly Candle

Gents after Friday’s non events from Moody’s & Fitch, the ZAR has also strengthened.

Due to recent political uncertainty and with the S&P rating decision on Friday I would now advise remaining square.

“In Fundamentals might be good for the first third or first 50 or 60 percent of a move, but the last third of a great bull market is typically a blow-off, whereas the mania runs wild and prices go parabolic.”

– Paul Tudor Jones

USD/ZAR Daily Close

We are still waiting to buy the USD, but with current political uncertainty and the S&P rating decision on Friday, I would now advise staying out.

  “I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms. – PTJ