 Hello traders at CMC Markets. Welcome to another update by ROG Research for Monday 5th of September, recorded on Friday 2nd of September. I'm Trevor Neal and I'm based here in London. We'll start as usual by having a look at what's happening in the world and there's a lot happening in the world, major indices. Then we're going to focus on the S&P and then we're going to focus on the SPX ROG momentum plus CFD. This is a ROG of major world indices versus the MSCI world index, which is here in the middle. Last week Julius had pointed out the trajectory of the US 30 index, which was moving into the leading quadrant. The S&P index, which was in there but as weakened and we'll cover this in more detail in a moment, but they joined the Russell 2000s. All the US indices were right of the JDK-RS ratio 100, getting a relative outperformance. But the most striking thing is this behaviour over here. Over the week we've got long tails here in the UK 100, the Australian index and the Nikai. All of them shooting across powerfully into this quadrant, leading quadrant and heading easterly. In other words, with strong fast movement of increasing RS ratio. Over here we have, if you like, the rest of Europe and then down in here in the lagging quadrant, the horrible place, we've got the tech 100, the NASDAQ index, which is also heading west. So looking on a RS ratio basis, looking to deteriorate further relatively. So of the US indices, this is the one exception. So the tech is still weak and it's moved to the bounce in it as it seems to be over. And it's now leading the weakness of the indices, which are sort of turning a bit towards the southwesterly direction. And not as good as the UK 100, UK 100 benefiting from a weak sterling. The UK 100 is made up of a lot of commodity companies and dollar earning companies. So not really very representative of KPLC. It's more of a exporting group of securities and therefore benefits from a weak currency. So this is the group here. Now the something that may not have struck you before, but this strong message in these, this group here is countered by a fairly strong message in the tech 100. So this is an opportunity potentially if you're interested in that for a pair's trade, one index versus another. The long index that you might choose and might prefer would be in this group here. And the one that you would be looking for to go against it, to short against it, would be something in this quadrant here in the lagging quadrant that is particularly one which is heading west and ideally southwest. And so we've got one candidate in here. The position like this long and short makes it market neutral to the stock market itself and the movements of the STI world. And so it's a relative performance of this group versus that one there. So think about that as potentially an opportunity for you. Now let's look at that P index in detail. Now it had moved up very strongly and as you see the MACD had tracked this really well, but it had topped out two weeks ago and crossed over in the MACD and has been moving down being rebut from resistance at 4,300. It breaking retesting resistance of roughly 4,200 and now coming down to support at 3,900. Support does intensify a bit here, but it's quite threatening. Of course, if it were to go down below 3,650, but that's quite a long way below. So how is the behavior of the S&P this index which has moved into the weakening quadrant. Here is incidentally another way of looking at the S&P moving into the weakening quadrant. Here it is the RS ratio which is above 100. So that is right of the vertical 100 on the RRG chart, but here is the momentum which is below 100. So that means it's down below 100 and the momentum and you see they're moving together. Now characteristic of an interpretation of this which you can see very easily in the RRG lines is the leading characteristic of the momentum versus the ratio itself. And you'll see here, look at for example the top here we rallied in the ratio but the momentum went down first. We came into a low in the ratio but the momentum was on its way up first. The ratio was climbing here but the momentum diverged and turned down and led this fall here and now we have got this turnover they're moving together. And the point I want to make here is that the momentum has not led turned up yet ahead of the ratio and they're moving down generally together and therefore it would indicate that this characteristic of weakening in the S&P will continue. However the RSI Relative Strength Index, Wilder's Relative Strength Index is a recently very low reading. People say this is oversold it is but it's here because it's extremely weak. It's a message of weakness in the market. If it were to turn up through 35 from here then I think a temporary low would be in place but that is not the case right now. And what worries me and dominates my thinking the most is the MACD gap between the MACD and its moving averages widening. This means the momentum on the downside is increasing. So it looks as though this characteristic behaviour that we're getting here in the S&P of weakening relatively is likely to continue. Now last week Julius was talking about the S&P ROG momentum plus CFD and how it was the 10 stocks that make up this CFD are all energy stocks. So it's heavily dependent on the energy sector of the S&P. It's named the S&P at this moment until rebalancing it's made up of 100% energy stocks. So he looked at heavyweight member of one of the holdings which is Exxon. So let's do the same. Now with the S&P ROG momentum plus 10 stocks being all energy stocks this means that the fortunes of the CFD itself have been tied to the fortunes of the energy stocks. Here is a major mega energy stock Exxon. Now so this here could be a chart of the ROG momentum plus S&P. Exxon and Julius focused on this was heading up powerfully last week towards this gap. It did in fact fill the gap and break a little bit up through the gap and the gap top was at 100, the big ground number 100. But he reversed very sharply this week down from there filling the gap and going through 98. Resistance which had become support and broke it and has come down to the next support level which is essentially at 94. Although we've still got rising lows pattern in here this is very big reversal and abort of the bull move. Now what's the prospects for this and therefore you might say is the surrogate until the rebalancing for the fortunes of the ROG momentum plus S&P CFD. Now the RSI as you can see is coming down hard and so the slope of it is very steeply down and it's not yet oversold. It does look as though we can go down further. The MACD itself has crossed really since the first time since mid-July we had to tickle through here but when even this little bit this big drop here was hardly sufficient to make it cross its signal line. We've been holding long since mid-July but now it too has crossed. So this really looks bad for it with the weakness of the RSI not yet oversold and the trajectory of it heading so strongly this way. And then also the MACD may be just starting the intermediate term downtrend line for the stock itself. So any idea of the break of 100 and then a shot at the 105 level is now just in memory and is at the very least postponed. But what next for this now? The fortunes of this as I've already said very much will dictate the fortunes of the momentum plus CFD if they don't look good from a technical point of view. So it does look as though the momentum plus CFD will go down further if it follows the exon and the whole sector does deteriorate as it is indicated by the technicals. But do remember that the CFD of R&G momentum plus may be traded long and short and so customers can leverage take the leverage advantage of falls as well as rises. I will leave you with that thought for this week. Thank you very much for watching. Really appreciate you giving your time. We'll be with you again next week at the same time and possibly from a different place maybe from Julius in Amsterdam. Goodbye from Julius and I from R&G Research and may the trend be with you.