 Hello, traders at CMC Markets. Welcome to another momentum update by RRG Research for Monday, the 4th of July, and I'm recording it on Friday, the 1st of July. My name is Julius de Campanar and I am presenting to you from Amsterdam in the Netherlands. In case you were wondering why you see my face every week because the idea was that my colleague Trevor Neal and myself would take turns one week each, but Trevor had some health issues and he is recovering right now. It's all going well with him, but that's the reason why I have been doing and maybe we'll be doing a few more of these weekly updates going forward. Let's kick off with a quick look at what happened on the stock markets as we do every week. We start with the weekly RRG showing you the number of the world indexes and that image is changing slightly. I mean, the big picture is probably still the same. You see a lot of a lot of tails inside the leading quadrant. They're all predominantly non-US tails except for the Dow Jones industrials, which you find right here. So all the others are European and Asian indexes and Australia, the AS51, that's the AS6200, you see just turning into the weakening quadrant. The US indexes, I said the Dow here is the S&P 500, the Russell 2000 and this is the NASDAQ. Of course, because of the benchmark, that's the MSCI world, the US market, there's a big chunk of that. It's almost half maybe even more, I don't know. So it's kind of by default that when the US is on one side, the rest of the world is on the other side and that's exactly what you see here. But what I'm looking at is the direction of the tails and what you see is that the direction of the tails where it used to be predominantly non-US markets moving in a northeastern direction and US markets moving in a southwestern direction. That is now, at least for the near term, has changed. You see it best here in Australia, UK, you see the French CAC and the stocks rolling over, but also we see the S&P trying to pick up a little bit of the pace. The NASDAQ is doing it clearly inside the lagging quadrant, but it's very far away from the benchmark and the Russell 2000 is already on the way for a couple of weeks. I think the main takeaway from this image is that for the time being, the big picture is still for the world to outperform the US, but the near term seems to be changing. And of course, when you do trend following work, it's always a big question whether some of these changes are temporary in nature and then the big trend, the big long term trend will continue or will it be the start of a new movement too early to tell at the moment. When we zoom in on the daily RRJ, you see that movement of non-US markets losing momentum quite clearly. So here's the UK, Japan, Hong Kong, it's Germany moving into the lagging quadrant. You see the US markets picking up. Here's the Russell, here's the S&P 500, make a little jingle. Here's the NASDAQ. Last two days, not too good, but started to pick up again. And here's the Dow moving down. And that's what I want to focus on, because what caught my eye was the opposite rotation between the Russell 2000 and the Dow Jones industrials. I'm going to zoom in for you. So here's the tale of the Russell 2000 and here's the tale of the Dow Jones industrials. They're both American markets, but obviously the Russell 2000 is a very broad-based market with about 2000 shares in it. And here's the Dow Jones, which has only 30 stocks in it, as you know. And it's quite interesting to see that they are now moving in opposite directions. The message that I get from this is that the big mega cap stocks that are in the Dow are starting to underperform versus the broader-based market, which has large cap, mid cap, but also a lot of small caps in it, just the Russell 2000. That is a sort of an interaction that is interesting and that we can exploit. And that's what we're all here for, aren't we? So the Russell 2000 doing really, really well. Well, let me rephrase that. Starting to improve a little bit. And the Dow is rolling over, still inside the leading quadrant, but it's losing relative momentum. When I bring up the price charts of those indexes, then this is the chart of the Russell 2000. And at first sight, it's just another US stock market index peaked somewhere at the end of 2021, started to form a series of lower highs and lower lows, and is basically still in that process. If you look at the 7-day RSI on the Russell 2000, you see that the last low in the RSI is not confirming the low in the price chart. So it dipped below its previous low, but it's already went back below that level. And that dip was not confirmed by the RSI. That's a mild positive divergence in my book. If you look at the RRG lines, which is what causes the tail to show up on the RRG where it's showing up, then you see that it's coming out of a dip and they have now started to pick up. So the green JDK-RS momentum line is starting to move higher and it's now starting to pull the RS ratio line higher. That is making it move into that north-eastern direction, while still inside the lagging quadrant. That's the early warning signal. If we switch to the chart for the Dow Jones industrials, then you see, again, this is just like another US stock market index, peaked at the end of 2021, started to start a series of lower highs and lower lows, and it's still doing that. So if we look at the price chart, the difference here is that the NASDAQ dipped not as low as the Dow was doing, and the Dow is having trouble getting back above that level. I know that the dashed line here is a bit arbitrary. You could make it a little bit higher or lower, but it doesn't really change the message that the dip in the Dow is stronger than the dip in the Russell 2000. We also see that back in the RRG lines, where the Russell RRG lines had bottomed that were starting to move up, and here you see the Dow Jones industrials RRG lines, and they've peaked and they start to roll over. That's the most important message here. Also, if we look at the RSI for the Dow Jones industrials, you see that that last low in the RSI dipped below the previous low, so that is confirming that trend. So despite the fact that the price charts of both the Russell and the Dow are looking kind of similar in terms of price, there are quite some difference to find under the hood, which all speak to the benefit of the Russell 2000 at the moment. One of my takeaways for what's happening in the world stock market indexes is an interesting insight in the US markets, where it looks as if the broader-based Russell 2000 is starting to pick up strength versus the smaller Dow Jones industrials, which means that under the hood in the broader market, US market seems to be improving at the moment. We'll have to wait and see whether this is a big turnaround or just a temporary hiccup, but that's what I see for at least going into this week. Maybe it will last a few weeks more. Let's quickly look at the RRG for Forex. This is the daily RRG for the G10 currencies. And as you know, the big picture, if we start with the big picture here, the weekly RRG for Forex, and you see the US dollar is the center of the chart here. So this is a very, very clear message that the dollar is absolutely the strongest currency in this universe. If we look at the daily RRG for this universe, then we can see that it seems that a little pause or a little improvement for the non-US dollar currencies is underway. Swiss franc, insight leading. But what you can see here is that the Nordic markets in which in Krona, Swedish Krona, the yen obviously had a lot of attention recently with being so weak, that's now going through an period of improvement. And so do the British pound and the Euro and the Canadian dollar. Big picture, still US dollar strength, shorter term improvement for the other currencies versus the US dollar, or if you wish, a pause in the strength of the US dollar. Now look at the chart of the euro dollar rate. Then this is the daily chart and you can see that it stalled around 103. And we talked about this a couple of weeks ago, but I think I'm going to bring it up again, because I think it's very important. You see that this level is 103 half, let's round it off at 103 level, is pretty important. So we stalled here. Out of the second test of that level, the rally peaked again around 106. So it didn't manage to get back to the 107.708 level, which means that that series of lower highs and lower lows inside the euro dollar rate is still intact. Why is that 103 level so interesting and so important? Because this is a very good example of why you would never mistake the bottom of the chart with support. Because if we bring this to a monthly chart, then you can see why that is. This is a major support level in the euro dollar rate. And if we break that, there is a massive risk for further downside of the euro or an opportunity for more strength of the US dollar. I'm going to leave it at this for this week. Thank you for watching and I hope to see you again next week. Same time, same place.