ARTICLES

Market Developments

2 April 2019 By PDSNET

S&P500

At the beginning of March, we drew attention in an article to the key resistance level on the S&P500 index at 2813 and suggested that, after bumping up against this level for a while, the S&P would probably break to the upside and open the way for it to test the all-time record high 2930. That upside breakout is now occurring, so we should now see the S&P move steadily upwards until it encounters the 2930 level. Consider the chart:

S&P500 Index September 2018 to April 2019 - Chart by ShareFriend Pro (Click to enlarge the image)

Here you can see how, in the last few days, the resistance level is now becoming the support level – which is quite common with resistance lines like this. Obviously, we expect the JSE to continue following Wall Street up. The Apple results published on 22^nd March 2018 shocked the market and took the S&P down about 2% and below the support level, but it is recovering quickly. The underlying fundamentals of the US economy keep pushing the S&P back up to resume its long-term bull trend. It is now about 3% below its all-time record (2930 made on 20-9-2018).

SIBANYE/AMCU

In the middle of January we drew attention to the battle going on between the gold conglomerate, Sibanye, and the union, AMCU. We suggested that Joseph Matunjwa, President of AMCU, had made a tactical blunder by initiating a strike on 21^st November 2018 and that he would have to back down sooner or later – with catastrophic consequences for him personally. It has now become quite apparent that AMCU and Matunjwa are in a corner. Their members have been on strike and so without pay for four months. Even if they managed to get Sibanye to agree to the R1000 pay increase that they are demanding, it would take them 15 years to recover what they have lost. Sibanye is pursuing a legal action to declare that the other three unions at its gold mines, who have accepted the Sibanye offer, are now in the majority – which will enable Sibanye to extend its offer to AMCU members and declare their strike to be illegal. That could mean those AMCU members could be fired for not coming to work. We suggest again that this battle could be a precursor of what is to come when the government, after the election, decides to confront the union movement  on a national scale.  

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PDSNET ARTICLES - APRIL 2019

New Record on the S&P

Seven months ago on 20^th September 2019, the S&P made a new record high at 2930 – and from that level began a correction. Corrections are completely normal and even healthy events which occur regularly during the course of a bull trend. This ten-year bull trend began on 6^th and 7^th of March 2009 when the S&P made an intra-day low of 666.79 on 6^th and then made its lowest

Mathunjwa Backs Down

On 16^th January this year we ran an article in which we suggested that the confrontation between AMCU and Sibanye was a microcosm of the inevitable post-election battle between the government and the union movement. We concluded that article with the following: “To us it looks as though Mathunjwa is in a very difficult position. He has