A quick recon i do everyday in morning before opening :
Ps note: All IG cash for Alsi and Ftse and also using bid prices
Alsi IG close at 5pm Friday 40950
Alsi IG futures at 6.30pm when FTSE closes 40930
Ftse IG at 5pm Sa Time when our market closes 6745
Ftse IG at 6.30pm SA time when FTSE closed 6740
Rand/pound exchange rate at 5pm R17.6512
Rand/pound exchange rate at 6.30pm R17.5903
Alsi IG as of now 41027
Ftse as of now 6760
Rand /pound as of now R17.544
My calculation of what Alsi should be :
6760-6740 / 6740 times 40930 = 122 points so Alsi should be up to 40930 + 122 = 41052
However rand went from 17.5903 to 17.544
Therefore Alsi should fall by 17.5903 -17.544 / 17.544 = .0027 times 58% 41052 = 62 points
My calculation of current Alsi = 41052 less 62 = 40990 Current is 41027
So 37 points difference is negligible.
However i will do all these calculation again at 8am tomorrow morning as futures and pound rate changes
S is right when he say easier to trade Dow.. There are very few uncertainties to condsider when trading the Dow..
However when trading the Alsi there are 100 and one things to consider. Thats why its called the beast and at some times one thinks that it is doing its own thing but that is not correct.
Factors to consider first thing in morning before market opens to see which way we will be going :
1. Performance of Ftse futures which is nevetheless influenced by the American markets
2. The pound exchange rate - about 58% of our market is listed in the Ftse
3. As we are resource driven, the dollar exchange rate and price of resources. About 8% of our Top 40 is effected here.
4. The performance of 10cent in Hong Kong as this effects Naspers which makes up about 7% of our TOP 40
5. Performance of Sasol in New York night before as Sasol makes up about 6% of our TOP 40.
6. The Swiss franc/ rand exchange rate as this effects CFR which makes up about 10% of the Index.
7. See what is happening to BHP in Australia as this makes up about 13% of the Index. Ps this 13% is already included in the 58% listed in FTE.
8. Check Australia, Shangai, Hong Kong and Japanese markets to see how they are doing as this may lead to some direction in our market!
9. Watch the economic calender for the day to see if any major news may effect markets.
10. Check any good or bad news on other Bric nations which may effect our market or cause sell off.
10. Last but not least check local news headlines to see if Govt or Malema has not messed up again by making some radical statements in the press which may effect our market only. Also if any strikes planned.
So if FTSE and Dow are flying does not mean we will also be flying. If rand strengthens against the pound and dollar and resource prices weaken, we could have a red day while rest of world is flying
Ps : I may be slightly wrong with my calculations of the TOP40 % constituents above so if anyone can correct it please do!!!
WoW, thanks a lot, this is useful!