 Hello, traders at CMC Markets. Welcome to a new update by RRG Research for Monday, the 31st of October. I'm recording it on Friday, the 28th. My name is Julius de Campanar and I am presenting to you from Amsterdam in the Netherlands. As usual, we start with the RRG for World Indexes. As you can see, it's a bit skewed. You can see a lot of green tails that are on the right hand side of the plot and only a few, basically two, the Nasdaq and the Hangsang Index that are in the lagging quadrant on the left. What that means for the bigger picture, because this is comparing those markets to the MSCI World Index, and these on the plot are the bigger markets that the bigger markets are actually doing quite well from a relative perspective. So if we would plot all markets that are represented inside the MSCI World, you would see a more evenly spread out universe and you would see a lot of tails coming in on the leading and then the improving quadrant as well. But they are the smaller stock markets which we're not tracking here. Now, a few interesting rotations that we can spot. I think the real outlier here is the Hangsang Index. That's obviously a very weak tail. It's pushing deeper into the lagging quadrant, which is not good. And we'll have a look at the chart in a minute. No surprise, that's also not looking very good. The most interesting rotation from a tradable perspective is probably the opposite rotations for the German DAX Index, which you see rotating into the leading quadrant right here, and the American Nasdaq Index, which is rotating on the opposite side, moving from leading through weakening into the lagging quadrant at the moment. And that's also quite controversial because if you look at the Dow tail that's right here, that's probably better visible if I zoom it in a little bit. So inside the US market, you've got the Nasdaq going into the lagging quadrant, and you've got Dan Joe's industrials going into the leading quadrant. So you've got a ton of opportunities to square those indexes against each other and see if there are any ARP opportunities. Now, if we move to the, this is a weekly, so these are the longer term trends that we're looking at. If we move that to the daily RRG, then the image is a bit different. We will still find the Hang Seng far into the lagging quadrant. But you will see that the Nasdaq, which tried to move up for the last two days, is now moving the other way around, and the German DAX is doing the opposite. So they're going, getting back in line with what we saw on the weekly RRG. The fact that they are so jiggly those lines, that means that markets are quite nervous, that there are no real super strong trends, and certainly the dailies and the weeklies are not always confirming. So that makes me feel, well, maybe not nervous, but alert, so that we need to be alert that things may not work out as we expect them to work out at this point in time. Let's move to some individual charts. I already told you that the DAX is actually doing quite okay, especially on a relative basis, and you see that here in the RRG lines that are pushing above the 100 level. If we look at the price chart, the DAX is still below its falling trend line. It's pushing against that falling trend line, and we do need a break to actually get that push in terms of price. I think we can see if we move into the daily, you can see the struggle that's taking place around that falling trend line, that dotted line here, that is the trend line that we saw on that weekly chart. And here it becomes clear that the rally is emerging out of this small double bottom pattern that took place basically from the end of September to the break, which was mid-October, and we got the follow through here. So if the DAX is able to break that falling trend line, move higher maybe to the next resistance level, which is around 1300, 600, and then the major one is around 14,000, there is some good outlook for the German DAX index. We were looking against the opposite rotation in the NASDAQ, and if we bring that up, then you can see that the NASDAQ has not managed to creep up towards its falling trend line. That is reflected in the rolling over of the ROG lines, which are pushing below 100 on a weekly scale. And if we look at the daily, then you can see that the NASDAQ is not as strong as the DAX. It has not been able to reach that falling trend line, but I can hear you think, but hey, Julius, does this not look like an inverted head and shoulders? Well, it certainly looks like it, but it's not completed yet, it's not confirmed. So for the time being, I'm going to go with the relative weakness as it's shown on the ROG, as it's shown by the raw rather strength lines, only when the NASDAQ is able to push above that neckline, which is, that's rounded off at 11,700, then it will get a little bit more upside potential. But you can see that it is still well inside or well below that falling trend line. So you could get into a situation where the DAX breaks that trend line and is getting a lot more upside potential, while the NASDAQ is also breaking higher, but facing a lot more overhead resistance, which would still mean that the DAX is very likely to be the stronger market. Let's have a quick look at the S&P 500, because that's probably what everybody's looking at, at least maybe not trading it, but they're definitely looking at it. And that is showing you quite a similar picture. We are still well inside the falling trend on the S&P 500. Against the MSCI world, the US market is still one of the stronger ones. That's very, very clear. But from a trading perspective, you've got to be aware of the fact that the longer-term trend is still down. And we are at the moment on this weekly chart, we are moving up within the downtrend. And that's always quite dangerous, because you never know when that new peak comes and when the new decline comes. If we look at the daily, we see that in more detail. We see that here, this double bottom pattern is now completed today. So that's Friday. It's going to be an interesting day for the S&P 500. If we manage to hold above, let's say, 3800, 3790, then we are probably in for a further rally towards the top of that falling channel. But as I said, you never know when that peak comes, because there's quite a bit of resistance on the way up. I'm looking at 3900 right here, which is that previous low. And then there is obviously the main level, which is currently around 4100. That's the peak here, and that coincides with that falling trend line. So I think the general picture for markets around the world, and especially for the US, is that we are still in a longer-term downtrend, but we are moving higher. We're going to see some sort of a rally. Maybe the next two weeks, I don't know, we've got to monitor when that new peak comes in, and especially at what level that new peak comes in to make up our mind for the future further down the line. Quick look at the Hang Seng Index. As I said, that's one of the weakest, if not the weakest charts on the RRG. And you can see here that we talked about the Hang Seng Index in this program a few times. And it was always week, week, week, because we saw that falling channel forming and unfolding. And what we see now is that we're actually breaking lower out of an already falling trend channel. That's usually not a very good sign. And if we need to go back for a very long time to find any new resistance level, or support levels, because here you can see that even this level here is now broken. So we need to go to the lows of 2008. That's around 11,900. So for the Hang Seng Index there is still plenty of downside or new downside has opened up for more decline. So this I'd be very, very careful with this market. And you can see that in more detail here on the daily where you can see that even this newer, shorter-term trend channel we've also left on the downside pulled back a little bit and now are going down again. I'm going to wrap up this program with a look at the growth value rotation that's in the U.S. But I think that we can probably make that like a global thing for all markets and what you can see here. And that's quite interesting. And it sort of matches the longer-term downtrend that we saw in the S&P. Because what we currently see is that the value stocks, the value index is actually leading and the growth stocks are inside the lagging quadrant. Value stocks tend to do very well when markets in general are doing not so well and the other way around. So this is signaling strength of value, defense if you wish. And that makes me alert for the potential of a further decline in markets when this current rally is over. And the straight-out comparison between growth and value I think this speaks volumes. This is a big double top that's being completed and we're now pushing below this previous low. Sending an even stronger signal in favor of value stocks for the next... This is a weekly chart, so it's quite long-term. So at least for the next couple of weeks. Thank you for watching and I hope to see you again next week. Same time, same place.