Surviving Superstorm Sandy - and the rand

Hurricane Sandy certainly lived up to its “Superstorm” reputation – possibly the worst in US history, with over 50 million being affected in one way or another. Bad as this is, just imagine how much worse it would have been if there had been no warning, and therefore no opportunity or time to take action. Through careful analysis of thousands of previous weather patterns, their courses, speeds, pressures, effects etc, and then comparing Sandy with these past patterns, experts could predict several days before it made landfall that this was a destructive Superstorm. And the more analysis done in understanding previous patterns and what influences them, the better these experts can forecast future patterns, and thereby avoid disasters of extreme proportions. But do you know that patterns of financial markets (like the rand) are no different from weather patterns? And just as weather moves in law-abiding patterns of creation, so financial markets move in similar law-abiding patterns... as they reflect the underlying mass sentiment of those active in the market at that time. And these patterns repeat themselves over and over again – in smaller and larger degrees. So, through understanding the laws that move markets, and by analysing thousands of historical patterns of market movements, we can analyse a current market movement (like the rand), match it with historical patterns of similar degree and characteristics and provide a probable picture for the future based on how the mass of persons have reacted in similar circumstances historically. Above is an actual example of this technology accurately predicting the next storm on the rand – long before it hit landfall early October! And again in late October, before the rand weakened sharply in November. This allowed those who remained informed to take action – before it was too late. A bumpy ride remains ahead for the rand, and if you are exposed to rand fluctuations, keeping informed of its expected twists and turns (well ahead of time) will allow you to take strategic actions. Get a complimentary video update on the rand’s medium term outlook at www.forexforecasts.co.za/ go/ZAROutlook now. James Paynter is head market analyst with Dynamic Outcomes, a specialist market analysis company. www.ForexForecasts.co.za/ go/ZAROutlook