The storm has begun ... as predicted

The rand has cut loose from its range-trading to hit a three-and-a-half-year high of 8.9968 on 8 October 2012 – and in so doing entered our forecast target of above 8.80 (given in last month’s column). And, of course, as usual, economists and financial news reporters were scurrying around to find all sorts of reasons to justify this current move: the nationwide transport strike... continuing mine strikes following Marikana ...Moody's downgrade of the banks ...Amplats firing 12000 workers The funny thing is, if the rand had moved stronger, they would have used the same reasons, with the opposite spin on it: Investors shrug off Moody's downgrade… Rand rallies as investors pin faith in mining sector. And so on. This is classic looking-back economist logic, and while it may help put some reasoning to the rand's collapse, it does nothing for telling you before the fact what was going to happen... or better still, where to now? By contrast, the chart that we showed in last month’s column gave us a clear picture of where the market was going ... long before the fact. This Medium Term target was first published back on 16 July 2012 – a FULL MONTH before the Marikana massacre. This month’s chart shows this “before and after” together with more recent forecasts issued in September – shortly before the rand took off. Before Moody’s downgrade of the banks, before the nationwide strike and before Amplats fired their workers. That is the power of the Elliott Wave Principle, and this technology which enables us to predict future movements ahead of time, based on law-abiding patterns of mass investor sentiment and human psychology… giving you objective, scientific-based forecasts that allow you to ignore all the noise and plan your business and forex transactions with over 80% certainty upfront... instead of regret at what might have been – after the fact. The future of the rand remains bleak with a move above 9.00 expected over coming months. See our video update at www. ForexForecasts.co.za/go/ ZAROutlook for more details. ● James Paynter is head market analyst with Dynamic Outcomes, a specialist market analysis company which has provided forecasts on the rand (and other currency and commodity markets) to local and international clients since 2005, with an average accuracy of over 80%. CAPTION a regular monthly column by james Paynter