Wednesday, 30 September 2015

Samurai Summary: Tops Tweet 30/09/2015

Green energy's golden boy Elon Musk has done it again by launching a new edition to his already existing product line of electric powered cars. The Model X is a 7 seater SUV targeting the family orientated car market. The car goes from 0 to 60mph in just over 3 seconds putting to rest the belief that electric cars can't match the power output that a fuel powered car can.

Musk, who is known for pushing boundaries, has conceptually designed a car that mimics the exact standard of car utility seen today but powered by electricity. I think it's quite courageous for someone to tackle a market such as the US which is known for its brute muscle engines with a gas guzzling nature. He hasn't only proven to the world it's possible to do but his actually brought it to market for sale, a feat not many can say within the field of green energy.

I feel the sector possesses vast amounts of potential however we need to move away from awareness campaigns and get into action. It's enough talking about the damaging effects humans have on the planet but not enough has be done which is why the developments happening around Tesla sets the precedent for others to come forth to match or even improve on those technologies, a catalytic moment that could drive forward the progression of human engineering.
I found this tweet intriguing for one reason that the BTFD sentiment seems to have gone silent over the past few weeks with many abandoning the thought of an attempt after being crushed by market volatility. It is evident that global markets have initiated the first leg lower, a move which if observed properly, has damaged long term technical areas. Should we be concerned?

Yes indeed we should. The basic assumption tells us when it comes to technical analysis the longer the timeframe the more reliable it becomes, so it doesn't matter if shorter timeframes indicate bullish direction, the market has now enter a phase where selling pressure has intensified and if the bulls are to prove their worth they going to need quite a bit of fundamental backing behind them something we aren't hearing too often these days.  

My good trading pal Petri Redelinghuys of Inkunzi Investments expressed his worry last month at the amount of losing trades he had been incurring at no fault of his own. Probably the greatest challenge a trader will face is knowing when it's the right time to starve off trading activity and let the market work itself through it's tempered condition.

So when I heard he had gone into cash I had to applaud the man for his brutal honesty not only with his clients and friends but most importantly himself. It seems from current conditions there is a sense of relief on his part observing from the sidelines with only time to tell when the right conditions provide the conducive environment to begin trading once again. We'll be following him closely.

I reported yesterday that Glencore management had released a statement quashing claims by analysts that said the company could face crunch time when it comes to paying its debts. Management said that the company was robust, had a cash generative balance sheet and the ability to service all its debts should the need arise.

This was taken up nicely by the market who has favoured the upside but left me puzzled. What has changed since Monday that investors feel more confident than they were 2 days ago?  If the statement has relieved many by asserting their trust in the company why was that trust tested on Monday by plunging the price 31% ?

Clearly there is a degree of irrationality going on in the market at present with outcomes like what has happened having detrimental effects on those trading the stock. Perhaps it's best to be in cash if market participants can't trust themselves.  
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