Tuesday, 25 August 2015

Top Tweets Today-25/08/2015

I was so surprised when I heard this news story I decided to yawn. The much anticipated decrease in the RRR (Reserve Rate Ratio) was announced coupled with a decrease in the lending rate to try well up fears that the Chinese stock market is on a collision course. It was also said that the Chinese government will no longer support the market and instead opened up discussions around the merits of supporting it said a person close to the source. This suggests that maybe the government has learnt its lesson about meddling in markets. What puzzled most was the timing of the announcement which was expected to occur on Sunday. This could be Beijing's way of attempting to make their predictable intervening schemes unpredictable which ultimately backfired on them.


Oil has been dropping for the last year now and you have to wonder when we'll start seeing the impacts materialize. That's what drew me to this piece on Saudi Arabia, the leader in OPEC and largest economy in the Arab world. It's revenue raised from oil represents 90% of government revenue which does make for a worrying case for their economy. This could possibly be the start of a catalyst for the bottoming of oil, all the while the political hot cooker is boiling over and could bubble over at any moment.


The guys over at SeeitMarket have been quite busy of late analysing the recent selloff we saw yesterday. Here's a great piece from founder of Seeitmarket, Andrew Nyquist who's been watching the situation unfold on a weekly basis since earlier this year exhibits some interesting market breadth indicators his been using and the clues they left behind. He also uses an important tool when assessing a trend, the fibonacci retracement, to show possible levels where major indices.


The general feeling around is that although the market has dropped off significantly it would be wise to allow a degree of stabilization to enter the fray and then start taking or adding to existing positions. If one thinks about the amazing rally we've seen after today , you can't help but chuckle at the thought that armageddon was being screamed yesterday with absolute euphoria today as if nothing has happened. Spoiler alert; events such as these take time to resolve themselves and during that time you will encounter high levels of market volatility so best be prepared for what the market has to throw it you because it can get messy.

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