 Hello traders at CMC Markets, welcome to a new update by RRG Research for Monday, the 16th of October. My name is Julius de Campanara and I am presenting to you from Amsterdam in the Netherlands. Let's take a look at the rotation for the various stock markets around the world. I have plotted the weekly RRG on the left and the daily on the right and the details that actually catch my attention are the ones, if we look at the weekly, that are inside weakening but curling back up because these are known strong rotations. It means that these markets are entering a new black in an already existing relative uptrend and that's the case for the New York Fang Index, it's the case for the NASDAQ, and the S&P, it looks as if it's moving down but if we zoom in really hard you can see that it has already started the first attempt to curl back up and then obviously there's the Nifty 50 which is already inside the leading quadrant. When we move over to the right hand side of the screen and in the daily RRG graph then you can see that the New York Fang Index actually leading the pack way up into the leading quadrant, that's completely confirming that rotation that is taking place on the weekly so we do need to look at that group, we always do that but now we do it a little bit more. It's also the case for the NASDAQ NDY which we can see here pushing off into the leading quadrant and you can see how it on the weekly has started to curl back up and then we go into the Nikkei Index and we have to look a little bit for that because it's inside the lagging quadrant but you can see that it's actually sharply hooking back up so that gives opportunities because the weekly tail is pretty strong with a relatively long tail if you compare it to the NASDAQ and the S&P especially and the Nifty. You can see how the Nikkei is inside lagging on the daily but has hooked up sharply and is now starting to move up. If we can continue this type of rotation I expect the Nikkei to be one of the stronger markets in the world. Then obviously we do have the S&P 500 which is a little bit buried here very close to the center so I've got to actually zoom in really strongly to separate the Hang Seng Index from the S&P. You can see rapid improvement for the Hang Seng Index although that is still pretty weak on the weekly but you can see how the tail of the S&P has slowly moved into the leading quadrant and I expect this if this continues and why not then it will actually drag the S&P tail on the weekly backup higher so the S&P is in the early stages of getting back into its relative uptrend versus the MCI world is what we're using here. Let's take a look at a few of those individual charts however before we do that a quick look at the rotations against a 0% return that's making it all in absolute terms or in price trend terms and you can clearly see the improvement that has taken place over the last two weeks across the board for stock market indices. They are now all heading towards that top right hand quadrant still on the left hand side so they're still shrugging off the downtrend of the last few weeks this is a daily chart but the the outlook the direction of these tails is actually very strong. Let's take a look at the S&P 500 you can see how we bottomed out around just above that 4200 level which is a support level mentioned in the S&P 500 quite often. We took out the previous high you could argue that it is a completed double bottom I rallied a little bit and then yesterday we dropped back and we're now testing that former resistance as support. Clearly on the way up there's quite a bit of resistance left obviously there's the area where we traded the last three days that is 4,380 more importantly there's the upper boundary of that gap that occurred on September 21st so that is going to be a resistance area 4,400 and I gradually higher all the way up to 4,600 but the good news is that it looks as if that move down has stalled around 4,200 where we were expecting support. We now need to work our way higher we'd love to see a new series of higher highs and higher lows getting in in the making but when all of that happens then the S&P is on track for a rally towards 4,600. If we look at the RSI you can see that is now out of the oversold area it's right in the middle so there's no threat from the RSI point of view and if we look at the MACD it started to turn back up very gradually very slowly but that's a good thing that's supported for a move higher and then finally the RRG lines they're showing you what we already saw on the RRG chart itself both lines now above a hundred and pushing higher. Slight consolidation for RS momentum but if that continues then we will see both RRG lines pushing higher and dragging the S&P tail further into the leading quadrant. Then the other tail that we needed to look at was the Nikkei index and as you can see the RRG lines still well below a hundred curling back up and that is an important thing. So it positions the tail inside lagging as we saw it but it has started to move higher. It's in the very early stages but you know in the early stages you got the best opportunities and when we look at the price chart you see a massive rally a massive jump off of that support area. It wasn't much it was a minor support area but it worked out really well around 3600 and you can see how last five days five six days this market has pushed higher and higher and yesterday we actually closed above the previous high and it looks as if we're on the way for a test of the resistance area around that's 33, 3 and 33, 7. So that's still quite a little bit to go but still on a relative basis that could actually be a very nice play because you can see here how if we make this chart a little longer that support that support area was actually a massive resistance area back at the start of 2021. So keep an eye on the Nikkei index because I think it's actually improving very rapidly both in price and in relative terms and then we go to the NASDAQ the US NASDAQ you can see how the ROG lines are pushing both above 100 pushing putting the NASDAQ right into that leading quadrant at strong momentum but maybe even more important it's actually challenging the overhead resistance coming from that falling trend line drawn from the the high of July and then following the recent high so this is becoming a pretty reliable trend line 1 2 3 4 5 depending how you count and now here is it's not a break yet but everything looks set to push higher and if we zoom in on that area you can see how the market has been challenging that area over the last two days so on Friday I'm recording this on Friday morning before the market opens will be a pretty crucial day to see if we can actually break that or whether we're gonna need another rotation lower for the NASDAQ the outlook especially from a relative point of view is actually pretty strong for the NASDAQ so I'm actually gonna be a little biased that we will be able to take out that overhead resistance line if you look at the MACD that supportive has has curled up has triggered a signal and and the RSI here is actually not definitely not oversold anymore not overbought either it's pushing against that 65 areas 70 area so all ingredients are there for the NASDAQ to push higher get out of that consolidation area and drag the market higher and then the New York Fang index very much alike with the NASDAQ not surprisingly you can see how we tested support here we held that very well and we're now on the way to overhead resistance it's a little bit blurry here over the last couple of months but if we drag that it's it's it's a very subjective way of doing it you can you can draw it right here and then we got these two highs and lines with this one if we as I call it a little bit more meat a little bit more so there's more price action here than this is the level I mean it depends a little bit on on how you how you look at markets I prefer my trend lines my levels to touch as much price action as possible here instead of just those one two three days if you would put it a little higher but in the end of the day it's it's a it's a subjective thing and it's giving me guidance and and something to to steer on with regard to levels where markets may go and in this case I think that the next target for the NASDAQ index is just shy of 8,000 where that trend buying or that that overhead resistance is hovering all in all things are looking pretty good for them for the New York Fang index if you draw a trend line over the RSI peaks here that has been broken we're pushing against 70 and remind you oversold is not necessarily a bad thing because if you know how the RSI is calculated the strongest move occur when the RSI is over 70 so we're getting very close to that level now let's dive into the components of the New York Fang index and first we do that with a look at the RRG that consists of the stocks that are in the New York Fang index got the weekly on the left and we got the daily on the right few tails that stand out first one from a negative point of view it's Netflix look at that big red tail pushing into the lagging quadrant rolling over inside improving just shy of getting into leading and now pushing deep into the lagging quadrant on the weekly scale now look at the daily this is actually confirming that rotation it's there now both pointing in the same direction so that daily tail is now actually underscoring that weakness as it can be seen on the weekly chart so that's the first one now the second one that we want to look at is we all know that the group and the market and especially communication services has been more or less driven by both Google and Meta in the last few weeks now here on the weekly you see Google inside leading but rolling over it's lost a relative momentum and Meta has already been pushed into the weakening quadrant they're still both good they're still both on the right hand side of the graph so that's still good but the near term it looks like Google and Meta have a little bit more of digestive work corrective work to do let's underscore it when you look at the daily tails because Google is right here alphabet I should say rotating into the weakening quadrant and so is Meta so Meta and Google are now in a so far as we can see temporary setback within the relative uptrend that they have been and the way that they've been driving the market definitely not negative but I think that there are now other stocks that are potentially taking over the leading role from Google and Meta inside the New York Fang Index Google and Meta tails moving into the weakening quadrant and on the weekly chart Google is still inside leading but rolling over and metas inside weakening with a very short tail which means that it is a stable trend and then just as we saw Netflix on the left-hand side the bad side of the graph we can see Tesla on the more positive side of the graph you can see Tesla's tail pushing from weakening into leading on that weekly RRG and if you look at the daily tail for Tesla it's inside weakening and pushing up so this is now starting to underscore confirm the positive tail the positive rotation for Tesla as it can be seen on the weekly chart so which stocks could now start or take over the leading role in this group from Google and Meta I think that we should pay close attention to Microsoft which is right here as well as Apple which is right here and let me zoom in for you so you can actually see what they're doing so here's Microsoft that's on a nice long tail pushing into a positive direction that's a strong heading Apple is making a little bit more of a zigzag move but in the end of the day it's moving into the top right-hand quadrant there's still not there there it's the early stages but if I need to look for stocks that could take over the leading role from Google and Meta this is where I'm focusing so Apple and Microsoft and when we look at it on the daily RRG so let me put that right here so here's Apple and Microsoft weekly and on the daily I need to go right in here because they're close together as well and you can see this is a tail of Apple and over the last two days that really hooked back up and that's underscoring that strength that we see here that little hook on the on the weekly tail so Apple is really waking up again and ready to move if you ask me now look at Microsoft this is a much more constructive tail on the weekly and you can see how it's the distances between the nodes is getting smaller and smaller and now Microsoft seems to be ready to curl back up and turn back up into that positive RRG heading between 0 and 90 degrees before actually hitting that lag in quadrant so I'm going to keep a close eye on the rotations for Apple and Microsoft and see whether they can take over the lead inside the New York Fang index from Google and Meta let's look at a few of those individual charts starting with Google again nothing wrong with this chart but you can see how it's losing some of its relative strength and relative momentum and that makes it slightly less interesting from a price perspective this is still a very good chart we're pushing against what we took out the overhead resistance and it looks as if we're now testing it as support but even if we drop a little bit further this rhythm of higher highs and higher lows are still there just a temporary setback for Alphabet for Google within it's already rising trend if we go to Meta it's pretty much the same story you can see how Meta is testing overhead resistance around 325 326 you can see had last two days we're struggling with that level again if we break it very good but you can see here how the RRG line so that's relative strength and relative momentum have rolled over has pushed Meta into the weakening quadrant it needs to digest a little bit of that relative strength that had picked up over the last few weeks but it still remains a very strong chart as I said Google and Meta strong charts strong relative strength but in the near term I think that they have to give back a little bit they need to digest the rallies that we've seen there and how they let that market higher and as I said we're gonna we're gonna take a look at Apple and Microsoft in a minute to see if they can take over that leading role now firstly the real negative here that was Netflix and if you look at the chart that is not surprising this price development is not very strong and two days ago we broke a pretty important support level just above 370 and you can see how we got the follow through yesterday with Netflix closing around 360 completely confirming the weak relative strength and the expectation for a further decline in price as well as relative strength for Netflix and then we've got the positive tail that's for Tesla this as you can see this is a completely different price structure price chart than we saw for Netflix so Tesla still you know nicely moving higher highs higher lows this trend line is now getting more and more validity major low this is like tested over a couple of weeks and still moving higher another test another test and now working our way higher off of that support line off of that rising support line RIG lines are curling back up pushing Tesla into the leading quadrant pretty soon I guess and then the two stocks that I think need to be watched very closely there's still on the weekly chart not that good that's because of that weak route strength that we had here but this is the daily the daily chart and here you can see the daily RIG this is that last move up that short move up that we saw on the RIG for Apple you can see how it's taking out overhead resistance that was built up over the last few weeks and right now the the way is open for a move towards 190 that's the first hurdle for Apple to take but when Apple starts to move that's usually a pretty good thing for the market it's pretty good thing for the fang it's pretty good thing for technology so all in all I think that this is a very important chart to keep an eye on it seems to be improving rather the strength is improving rather momentum is improving all eyes on Apple I would say to give you a clue for what's going on in the next couple of weeks and then to a lesser degree we have Microsoft relative strength very close you can see how these lines are very close to the benchmark but they are inside the improving quadrant they're pushing Microsoft up in terms of rather strength and in the price terms you can see how Microsoft has now seriously come off that support area around 310 312 and is working its way up to the 340 area where there is a ton of resistance coming in but that's because that is all-time high area so if we can start to take out these overhead resistance areas I'm pretty sure that this will improve the relative strength from Microsoft and that both Apple and Microsoft can pick up the leading role inside the New York Fang Index and potentially also inside the S&P 500 and a market in general I'm going to wrap up the show right here thank you very much for watching I hope you liked what we had to say and we will be back next week with a new update by RRG Research same time same place