Record Highs
It can be the case that when charting the markets, the technical analysis, not an art that has much credibility at the best of times, throws up ideas that seem to be against the grain.
This was the case earlier this month, with the price channel target on the FTSE 100 heading for 8,700. Of course, over the years there have been many false dawns on the upside. However, set against what is supposed to be one of the worst economic / political set ups in the country, the FTSE 100 heading to record highs any time soon seemed ridiculous.
This was and is particularly the case given the way that the mid caps, and especially AIM and the small caps are by words for everything wrong not only with the economy, but with the London stock market and those who regulate it. Indeed, it has been discussed here many times, in the full knowledge that not only will nothing be done to improve the situation, but as in a parallel to 1984, it is the very complaint which will be noted and doubled down on.
That said, it is very much worth noting the record close on the FTSE 100, so early in the year. One of my personal “secret” stock market rules is to buy on Bonfire Night, and sell on Valentine’s Day. Until this week the rule for 2024-5 was not looking great. But now we should be fine. We have been helped by UK growth not going negative in November, inflation coming in slightly lower than expected, the run up to the Trump inauguration, and perhaps most important of all, the negativity regarding the Labour government and its tax and spend 1970s style approach being overdone.
Perhaps the soaring FTSE 100 can be claimed by Labour as its first major growth success? After all, “Rachel from Accounts” got her £600m from fellow reds China. If the Bank of England is really intent on lowering interest rates, then FTSE 100 at 8,500 plus, and a stock market revival may not just be a pipe dream, although pre-Trump enthusiasm seems to be the most likely explanation for this week’s bump to the upside. It is hard to believe the BoE will do the right thing, especially since it is difficult to remember a time since it gained its “independence” in 1997, when it has done so.
Millionaires Exit
The headline this week was that a millionaire leaves the UK every 45 minutes under Labour, with the overall figure already over 10,000. It is surprising that the number is not even more, and that the number of people leaving, with or without seven figures in their bank account is not far higher. The truth of the matter is that apart from a love of Blighty where British values are being eroded by the day, or because of schooling (wanting to pay the VAT), there is now little reason to remain in this country. There is also very little reason to work, set up a business, maintain a business, or not retire if you are anywhere near to that age.
I have noted on X that people are questioning, given this state of affairs, how the Labour government could have got everything so wrong? The answer is actually according to its doctrine, it has played a blinder. It does not want rich, talented, entrepreneurial people in the country. Every success story is a failure of socialism. The fewer of them they are, the better socialism, the nanny state, and dependency culture can work. The ideal destination for the UK by the end of the current term in 2029, will be a poorer, but “fairer” country. Reward failure and punish success, in order to get everyone to the same level of ordinariness.
Small Cap Multi-Baggers
Apart from the technical analysis on the FTSE 100, suggesting that there was light at the end of a rather long tunnel, there have been other glimmers of hope for the stock market. They have taken the form of significant one day multi-bagging situations. Even better, they have normally come off the back of momentous news. This is interesting as one of the necessities of being a small cap company – pulling rabbits out of hats. It may be the case that the lay of the land in 2025 is so arduous that significant dealmaking is the only way of rising above the clouds of the economic slings and arrows we are currently in.
Of late Trellus (TRLS) rose on Johnson & Johnson news, Fiinu (BANK) soared on a positive take up of its overdraft app, Immupharma (IMM) on an autoimmune disease breakthrough, Quantum Blockchain (QBT) on the prospect of faster bitcoin mining via AI. A strategic tie up at Celadon (CEL) has at least temporarily saved the day, and must have pummelled the shorters.
A favourite on Zaks Traders Café, and a 20x riser since the chart was first highlighted last month, has been Sealand (SCGL). Its shares have continued to rise in the wake of its investment in EVOO AI, a proprietary data platform with specialized AI learning models. Rising on no news, and having to put out a cold water RNS saying that knows of no reason for the rise, was Blue Star Capital (BLU). This kind of rise is just what you want to see if you are anticipating a bull market in small caps.
Vinanz Joins The Main Market
It was celebration time for David Lenigas and his bitcoin mining vehicle Vinanz (BTC). This week saw a combination of Vinanz up listing from the Aquis market, to the main board of the London Stock Exchange.
This is quite an achievement given we know how snooty regulators and exchanges are regarding not only anything new and innovative in the UK, but also regarding all things crypto, which obviously fit in with the avertion to anything new / different. That said, the timing for Vinanz is perfect, just ahead of pro crypto Trump, and bitcoin at $100,000 plus. I spoke to David Lenigas on Friday regarding Vinanz and its prospects.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.
