Wednesday, 9 September 2015

Samurai Summary: Top Tweets 09/09/2015

I woke up this morning to find the Nikkei 225 flexing its muscles with a hard rallying on the back of comments made by Prime Minister Shinzo Abe committing to lowering corporate tax rates to bolster the economy. The index finished up a massive 7.71%, its biggest one day gain since 2008. The move follows the last few days of dramatic down days

The massive moves have helped bullish sentiment gain momentum following sour trade numbers out of China yesterday led many to believe more stimulus from the Chinese government would take place in the next few weeks.

Following the close of today's session I got straight to twitter to gauge what the feeling was amongst traders about the move with some expressing elation whilst others sending out a warning that all is not well within the global financial markets. This tweet from chartist Andrew Todd expresses worry about the move and suggests that the move has resulted from a Bear Squeeze.  Due to the negative sentiment built up over the past week the most likely scenario is traders were attempting to ride the momentum downwards and albeit got caught on the wrong side of the move this morning. This creates a frantic rush to close out positions which lifts the prices dramatically.


The conclusion I come to from all of this is simple, financial markets around the world are not well at present and caution needs to be heeded when participating with much attention focused on managing your risk. Times like these produce opportunity but in the same breathe unwanted emotions that need to be controlled.

Sibanye Gold to Buy Mining Ops from Amplats

I wasn't too surprised to hear this news story, Sibanye Gold, the unbundled South African company of Goldfields, agreeing to buy platinum operations from Amplats in the Rustenburg region. Rumours had been around for some time now however given the bad state of affairs within the platinum sector at the moment there were a number of buyout propositions for the company.  One only needs to look at the 3 biggest platinum producers with the worst performer being Lonmin where prices of the share have plunged from R24 in June to under R5 as of today.

There is general uncertainty of what action Lonmin will take however it needs to be prompt as the plunge in the price is causing much despair amongst shareholders which could result in the company being regulated to the ranks of hero to zeros.

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