27 November 2009
	JSE Take a breath

The 53% rally on the JSE from its March lows has surprised many. But some believe the pace is not sustainable. The graph shows the current level of the JSE all share index is the place where the rally may run into stiff resistance. The all share index around 27 000 represents a 61,8% Fibonacci retracement of the entire bear market, and also lines up with an internal trend line which joins the lows of August 2007, January 2008 and August 2008. The rally of the past nine months has been driven by a glut of liquidity and record low interest rates in the developed world. It has also been aided by the government stimulus packages in many developed countries. Q2 and Q3 GDP growth has set the bar high and next year's GDP figures may disappoint. It may be time for a breather. Garth Mackenzie of Summit TV's Traderscorner