The JSE pullback seems a bit overdone - biggest culprits are resources and a general pullback (still) on foreign investment into emerging markets (still have to review JSE supplied stats to confirm this). So, two potential scenarios exist) 1) Resources bounce again, and since the rest of hte JSE is not sharing international optimism yet, a flow of new money comes into emerging markets. That will push the JSE to new highs. 2) Global markets pull back - and resources continue down - that is going to hurt the JSE IMO. In my experience, if the JSE is showing weakness in times of international strength, then a pullback on international markets hurts even more. So how to react? Well, Simon's lazy trade is the obvious system for capturing the first scenario. As for the 2nd? Well i challenge anyone to find me a system which would promote shorting at these levels!
