Trading Analysis - 30th Oct 2018


30 October 2018

End of Day

The story is only partly told. The beginning and middle were recounted in the article 'When will First Island Clear?' which is the sequel to 'When will Erongo Clear ?'. I heartily commend both to the reader.

This morning's 15M trade offers a glimpse of the Dénouement but the full story cannot be told until we are permitted, nay privileged, to see the complete trade data.

This information is currently hidden from us - the Private Investors; us amateur hour punters who have no idea what we are doing and who should simply stay quiet, behave like lemmings, and accept the fate that those who run the markets assign to us.

Except, on this occasion, we do have a very good idea of what has been going on today and for all of the last 8 weeks. And, it is not beyond the bounds of possibility that it is this exactly this knowledge, made public, that has brought the First Island selling to an end quite so swiftly. The word was out and so the charade must end.

What we can say, even before this data is published, is that after the 15M trade was reported the SP became unstuck and moved significantly more freely in response to buying pressure than it had done at any point in the previous 3 weeks (except the afternoon of the 17th of October) - it is therefore not unreasonable to conclude that the First Island overhang was removed this morning.

For the purpose of analysis if we ignore the 15M trade (at 8:02am) in the chart above it becomes much easier to see how excess buying has yielded price appreciation that keeps buys and sells in approximate equilibrium. This is how people think that markets should behave. How rare it is to see it.

Following exactly my previous approach to identifying significant trades / First Island sells I see nothing that matches this until the price level of 30p is reached -  this is not until past 3pm in the afternoon (the highlighted trade). I don't believe that this is First Island but may instead correspond to some other holder that may have previously sold in 250K blocks when above 30p during the post-Sojitz price peak (the green bubbles on the WWFIC bubble chart).

The Market Maker's position cannot be determined until full trade data is published - this should be no more than 3 days. Only then will we be permitted to see if the Market Makers decided to put their hands all the way to the bottom of First Island's magic bag of shares to help themselves to a few million cheap shares. I suspect that the temptation may have proven just too great to resist.

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