JSE ex Big-5 in Bear Market

2016-09-16 08:39

In prior discussions we have repeatedly warned of divergence on the JSE, whereby a smaller and smaller pool of large-cap Rand-hedges are propping up the JSE. The causes of this and why it is a precursor to a bear market in stocks are discussed in depth on this Sharenet VIEWS article.

Below is the updated Total Return Indices of the TOP40, the TOP-40 excluding the Big-5 and the Big-5 (Naspers, BHP Billiton, British American Tobacco, SA Breweries and Richemont)

We see that the Big-5 still dominate JSE market action, and together with the overall SA TOP-40 are putting in higher highs and higher lows - behavior expected from a bull market trend.

However, we can see that the TOP-40 excluding the Big-5 peaked 16 months ago in April 2015 and is printing lower highs, which is behavior more consistent with a bear market.

You can read what this means to investors in the rest of this article on Sharenet VIEWS.

Dwaine van Vuuren

Retail-side Research

RecessionALERT.com (USA)

PowerStocks Research

Sharenet Pty Ltd

Dwaine van Vuuren has a BSc(Hons) degree majoring in Computer Science and is a full-time trader, global investor and stock-market researcher. His passion for numbers and keen research & analytic ability has helped grow RecessionALERT.com (US Based) and PowerStocks Research (SA based) into companies used by hundreds of hedge funds, brokerage firms, financial advisers and private investors around the world. He now also heads up retail-side research at Sharenet. An enthusiastic educator, he will have you trading and investing with confidence & discipline through his nationwide seminars (book here.)

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