Snow in South Africa
Cape Town – South Africa. Snow.
Well, it looks like Global Warming is off to a poor start this Southern Hemisphere Winter.
Cape Town – Winter has struck with a vengeance in the Western Cape with some towns recording their first snow falls in almost 20 years.
Several mountain passes in the Southern Cape and the Eastern Cape had to be closed after heavy snowfalls.
Tourists expecting sunny skies in Cape Town were greeted by snow on Table Mountain, where the temperature never rose above 1°C.
It was the heaviest snowfall on the mountain since 2003.
Read The Full Story Here: http://www.news24.com/SouthAfrica/News/Winter-strikes-with-a-vengeance-20100615
And it has some nice pictures…
And it’s closing a lot of roads:
The roads closed due to heavy snowfall are:
– R63 between Somerset East and Pearston at Bruintjieshoogte,
– The Nico Malan Pass between Seymour and Whittlesea,
– R61 between Graaff-Reinet and Cradock at the Wapadsberg Pass,
– N9 between Graaff-Reinet and Middelburg at the Lootsberg Pass,
– N6 between Jamestown and Queenstown at the Penhoek pass,
– R58 between Elliot and Barkly Pass.
– SAPA
Read The Full Story Here: http://www.news24.com/SouthAfrica/News/Snow-wreaks-havoc-on-EC-roads-20100615
So we’ve got ‘year round winter’ with the Ski seasons in the Northern and Southern hemispheres overlapping, and we’ve got a load of fresh snow in South Africa.
This is not the Global Warming I was promised… And it’s having an impact on the World Cup (Soccer for Americans, Football for the ROW…)
“Significant snowfalls are expected on the high ground of the Western Cape overnight Monday. Very rough seas with wave heights in excess of 5m (five metres) are expected south of the Orange River spreading to Port Alfred, subsiding between Orange River and Cape Agulhas on Tuesday,” it said.
Strong winds were also forecast to batter the Eastern Cape, which would result in rough seas along the country’s coastline.
“Gale-force westerly winds (35km/h to 65km/h) are expected in places between Plettenberg Bay and East London on Monday, spreading to Durban by the evening. Very cold, wet and windy conditions persisting over the western interior of the Eastern Cape spreading eastward into Tuesday,” it said, adding that snow was also expected in the Northern and Eastern Cape.
While there was no snow forecast for Gauteng, the province was expected to experience cold and windy weather. In contrast, there was a warning for runaway veldt fires in Limpopo.
http://www.sport24.co.za/Soccer/WorldCup/NationalNews/Cold-weather-for-World-Cup-20100614
And if that weren’t enough, it’s too cold for the penguins…
Pretoria – Nearly 500 African penguins died in 24-hours because of cold and wet weather at Algoa Bay in the Eastern Cape, SA National Parks (SanParks) said on Tuesday.
http://www.news24.com/SouthAfrica/News/Cold-kills-500-penguins-20100615
And, just because it’s fun, there is an automated snow map here:
http://www.snow-forecast.com/maps/dynamic/southafrica
But you do have to pick something (like snow in the last week) before the map shows anything. (Right side, under the “choose weather map” dropdown).
Guess that whole ‘Antarctica Melting” thing is gonna have a hard time being sold this year… what with it being very very cold as far north as South Africa.
Musings from the Chiefio 
Wow, those African penguins are a sensitive lot, aren’t they? Didn’t their keepers know enough to bring them inside?
Less climate more economy please, sir?
They both come as they are ripe.
Right now the market is doing a simple retrace to the moving average stack in a ‘correction bias’ market. Not much to do other than day trade it or do fast swing trades.
We’re stuck in the summer doldrums waiting for the Feds to decided what the Financial Industry will be worth and to decide if they are going to nationalize oil or just kill it outright…. Until that’s resolved, there’s not a lot of ‘trend’ to work with.
So I could tell you to hop on the market on disaster bad news down days and sell on good news up days, but that’s kind of old hat and pretty well known for traders. Investors ought to be in high dividend resource companies (as I’ve said I’ve done already). Or I could try to make a more or less dead market interesting. Or I could just accept that for now I’ve said what needs saying and that buying into a rise out of a correction in a down bias market is very tricky and risky (especially as the rebound gets long in the tooth) AND that it’s not time to short again (YET); and instead find something else of interest to look at while waiting….
So you will get both. Climate and weather, after all, drive many money and investing markets. The two are bound eternally to each other.
That South Africa is having a hard start to winter and that the USA is having a whole lot of wet in the ‘Heartland’ both argue for poor crops. Think MOS, MON, POT, JJA, etc. If a check in with Australia and New Zealand show the same (and given how last winter worked out ‘up north’) it will be important to own even more gas trusts and gas pipelines. (And less property and casualty insurance…) And so it goes.
But right now, we’re almost at the center of a falling moving average stack. If you traded in at the “low RSI near 20 rising” with a MACD cross over topside, it’s time to start trading out as the ‘danger zone’ is that SMA stack. In a down trend, the expectation is a touch and fall away to the downside (that ought to be played ‘short’) so it’s not time to be owning this market. At the same time, it’s possible this is an end to the ‘correction’ and we will punch through that SMA stack. If that happens, we will return to it from the topside. At that touch it is time to buy the (then new) rise. Not before. So “at the stack” we sit and do nothing (and I try to figure out why I find it so hard to buy a short position at that touch… a personal failing).
Given all that, I’d rather do my longer cycle planning; and that means also looking at weather trends…
So we’re watching “Hurricane Season” to see what it says will happen to oil in the gulf. And I’m collecting dividends on ‘on land’ gas and oil trusts while waiting for a hurricane alert to drive the prices up; and waiting longer term for the ‘drilling shutdown’ to spike gasoline to over $4 a gallon. Then I’ll sell. And I’m watching the crop situation for a reasonably good indication of cool wet weather having it’s impact.
And that means looking at how winter is starting to unfold in the Southern Hemisphere… (And noting that 7 quake north of Australia … definitely not a time to be buying property and casualty insurers…)
FWIW, I have a particularly strong personal interest in energy markets of all sorts. I studied the whole issue of fossil fuels more than most folks due to the Arab Oil Embargo happening while I was in college. So I trade energy resource stocks a bit more than I probably ought to do. But I like it.
And if you are going to trade energy resource stocks (or things like chemical companies and fertilizer companies that are strongly impacted by natural gas prices…) then you must keep an eye on the weather, and it must be a global view.
FWIW SASOL the South African Synthetic Oil Company is a long time favorite of mine. They have signed ‘coal to oil’ contracts all over the place. China is very interested…
If you look at their chart:
http://bigcharts.marketwatch.com/charts/big.chart?symb=ssl&compidx=aaaaa%3A0&ma=4&maval=25&uf=7168&lf=2&lf2=4&lf3=1024&type=4&size=3&state=15&sid=4286&style=320&time=8&freq=1&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=7017&mocktick=1
it’s ‘gone flat’ with the market, but looks like it’s ‘rolling’ about $36 to $42. Until it develops a slope to that trend, I’d be willing to range trade it based on buy / sell points. With the cold in S.A., their business will be good…
If you look at JJA, the ag commodities, chart:
http://bigcharts.marketwatch.com/charts/big.chart?symb=jja&compidx=aaaaa%3A0&ma=4&maval=25&uf=7168&lf=2&lf2=4&lf3=1024&type=4&size=3&state=15&sid=2913189&style=320&time=8&freq=1&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=6944&mocktick=1
It’s looking like a ‘new bottom’. It’s off like a rocket, but needs to get through the SMA stack, then return to kiss it from the top (and not punch through) to start a new trend. So right now you can day trade it long (with a fast chart like a 10 day hourly) but most folks will want to wait for that long downturn to be confirmed over with an SMA stack crossover and a MACD crossover of zero. We’ve already got DMI “blue on top” and MACD with blue on top and good slope upward.
Very hot hand traders could trade in now, but I try to keep my comments pitched more a the average Joe who isn’t interested in day trades.
FWIW, Sugar looks to have made a pretty hard bottom to me:
http://bigcharts.marketwatch.com/charts/big.chart?symb=sgg&compidx=aaaaa%3A0&ma=4&maval=25&uf=7168&lf=2&lf2=4&lf3=1024&type=4&size=3&state=15&sid=3263095&style=320&time=8&freq=1&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=6066&mocktick=1
so I’ve bought some CZZ (Brazilian sugar company) on that last dip:
http://bigcharts.marketwatch.com/charts/big.chart?symb=czz&compidx=aaaaa%3A0&ma=4&maval=25&uf=7168&lf=2&lf2=4&lf3=1024&type=4&size=3&state=15&sid=2814579&style=320&time=8&freq=1&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=1847&mocktick=1
So you can see why I care about South African weather…. and hurricanes…
Basically, I’m betting on cold hungry folks in the S.H. wanting hot coffee, with sugar in it, and a warm furnace… and that N.H. folks will want ag chemicals and gasoline and to turn that AC this summer to drop the humidity…
And that all hinges on the weather…
Hopefully I’ve made the case that weather and economy go hand in hand. FWIW, one of the founding lights of Economics was Jevons (of Jevons paradox fame). He studied grain economics (and found it tied to sun spot cycles) and showed that highly efficient use of fuels leads to more total use, not less (thus the paradox). So the study of how fuel use, crop yields, and weather all interact is a foundational part of economics. Jevons is also known for the Theory of Utility. An absolute foundation stone of economics.
So while I’d love to be able to satisfy your request for ‘more economics’ and ‘less weather’, that would be like trying to have ‘more food’ and ‘less crops’ … Though perhaps I can spend a bit more time on showing how the one drives the other and why each is important…
For example this chart shows animal futures and grain futures on the same chart. Notice that as grain futures dropped, cattle rise? Lower feed costs make more profit. So more farmers hold animals to feed them up to larger weights. (But only up to a point. When too much livestock is being raised, it drives prices of beef, pork, chicken down…) So we have a natural hedge of sorts, up to the point where the extra animals are brought to market….
http://bigcharts.marketwatch.com/charts/big.chart?symb=cow&compidx=aaaaa%3A0&comp=jjg&ma=4&maval=25&uf=7168&lf=2&lf2=4&lf3=1024&type=4&size=3&state=15&sid=2913193&style=320&time=7&freq=1&nosettings=1&rand=4475&mocktick=1
Now, with grains so low, I’d expect less plantings. If we also get a load of wet weather making harvests hard, then some cold in Australia cutting their yields; that JJG line will rise and the COW line will start to roll off (as more farmers sell animals rather than feed them…)
Yeah, Ag Econ, but it’s a very important part of Economics.
(BTW, those ETFs use futures contracts and options so they are for modest term trades only, not long term investments. Long term investments go into things like the land companies and the ‘inputs’ suppliers….)
Finally, this chart of the ‘inputs’ suppliers and the commodity traders (like ADM and CME) shows what looks like a new bottom forming in the inputs suppliers. We’ll see as it develops. You can also see that trading the stuff is more of a money maker than doing the actual work…
http://bigcharts.marketwatch.com/charts/big.chart?symb=dba&compidx=aaaaa%3A0&comp=mos+pot+ipi+mon+cme+adm&ma=4&maval=25&uf=7168&lf=2&lf2=4&lf3=1024&type=4&size=3&state=15&sid=2572922&style=320&time=7&freq=1&nosettings=1&rand=6743&mocktick=1
as the CME Chicago Merc Exchange is the top most line…
FWIW, the Ag and Ag related markets make up a gigantic part of world commerce and economics. For all the talk of high tech and industrials, folks are always buying a heck of a lot of groceries, clothing, and soft goods. Even hot companies like StarBucks are tied to commodities.
http://bigcharts.marketwatch.com/charts/big.chart?symb=sbux&compidx=aaaaa%3A0&comp=bal+jo+nib+sgg&ma=4&maval=25&uf=7168&lf=2&lf2=4&lf3=1024&type=4&size=3&state=15&sid=9064&style=320&time=8&freq=1&nosettings=1&rand=6524&mocktick=1
Notice how, as folks have gone back to buying designer coffee, their stock is rising nicely? But also note that JO has a bit of a bump at the end? Those low commodity prices are likely to rise with renewed demand and poor weather. When that happens, watch SBUX for ‘issues’…
Cape Town and the Western Cape have a mediterranean climate – dry summers, wet winters; the rest of the country more standard fare – wet summers dry winters.
That said, SA winter weather is default mild to chilly, especially at night, but dominated by cold fronts coming in from the Atlantic. Weather such as they’re experiencing now is usually a biggie front coming through, or more likely two fronts in quick succession, with the second hitting before the effects of the first have dissipated.
A typical winter would have perhaps up to 5 or 6 ‘cold spells’ with one or maybe 2 being seriously cold as at present. Much of the country is at reasonably high altitudes – Johannesburg is similar to Denver, so adiabatic lapse rates play a part too.
That said normal overnight temps in many parts of the country from about May onwards, drop below freezing overnight, but climb to 15-18 deg C during the day.
There is the usual warm country belief that ‘it doesn’t really get cold here’ so there is almost no central heating, double glazing or similar installed anywhere. Many deaths during a cold spell due to exposure or asphyxiation from fires or heating in enclosed spaces.
E.M. Sasol is a good pick, both as a good example of the folly of peak oil predictions – just manufacture the stuff if you need it, and because they are SERIOUSLY good at what they do. I wasn’t aware of the China connection there, but clever move by China.
Ken,
I guess the keepers/rangers didn’t fancy the 5 metre swell and 65 km/h winds running at Bird Island at the time?
Can’t say I blame them. It is not the most convenient place to visit.
http://maps.google.co.uk/maps/place?ftid=0x1e650580b5ca7cfb:0x8a0090f3ab18e9f9&q=Bird+Island,+South+Africa&hl=en&cad=src:pplink_gc&ei=1RkaTMeWJNua_QbkvvHbCg
Thanks for the long thoughtful response.
@KevenM
You are most welcome. FWIW, I ought to be thanking you. I’d just assumed it was clear that weather mattered to trading, and it isn’t clear. So you have given me the idea for a posting making a canonical list of who is driven by what in weather. It will take a while to put it together, but I think it will be a good one. It’s questions like yours that make me think about what I’m doing and realize where there are ‘interesting things’ to post ;-)
FWIW, a “taster”:
“normal” weather is good for retailers. Too hot, sales drop off. Too cold, sales drop off. Warm winter, coats and sweaters don’t sell, bad for clothing retailers…. (and reflected ‘upstream’ to the clothing makers, and shippers…)
Bad weather (hot or cold) impacts cruise ship bookings and theme parks (Disney watches the weather…). That indirectly impacts restaurants regionally. Prolonged bad weather impacts restaurants more widely.
Lots of snow makes for good skiing, so MTN (Vail Resorts) does well as do the equipment makers, and tire chain sales (and snow tire sales and…)
Housing starts are suppressed by bad spring weather, helped by unseasonably warm and dry springs. All those homebuilder stocks … and materials suppliers… and the shippers again.
Of course, insurance costs are impacted by the number and size of hurricanes and tornadoes, floods, and even heat driven forest fires…
Cold wet muddy weather makes open pit mines a mess, so sales of new equipment can be suppressed (if you are not running the mine, you don’t buy new trucks) but the metals and minerals can spike up. And the reduced shipments again impact the shippers.
Energy, retail, ag commodities, grocers, travel and shippers, vacation and restaurants, clothing and food, homebuilders, insurance, metals prices, …
The list goes on and on. So it will take me a while to make a posting out of it. But just realizing that that was in my head, but not on the page, was a very valuable realization; one that you gave to me. And that response was just my mulling over that realization. So, Thank You! It is always a gift when someone gives you a useful realization…
@Chuckles
SASOL has been one of my favorites for decades. FWIW, IMHO if there was really a desire to “get off OPEC oil”, we would have done what South Africa did in the 1970’s. We’ve got more coal than Saudi has Oil, all we need to do is use it to make all the Diesel, gasoline, and Jet Fuel we could ever want.
That we do not do that is clear evidence that all the talk about “energy independence” is just a lot of hot air. I don’t know if it is because Saudi owns enough senators, or if it’s because our government is just incredibly stupid (or both), or… but that it is the case is quite clear.
America is to stay in oil bondage to OPEC indefinitely, any talk to the contrary (especially the perpetually unattainable hydrogen economy and the equally costly electric cars with a 20 year lead time to replace the vehicle fleet…) is just a smokescreen and distraction. “Who” and “why” can be debated, but with a clear and EXISTING solution in S.A., well, it’s pretty clear that ‘solution’ is not the goal…
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