 Hello traders at CMC Markets. Welcome to another update from me, Trevor Neal, a research analyst at ROG Research BV. This update is being prepared for you on Friday the 25th for publication on Monday, Bank of the Monday here in the UK, the 28th of August. Today we're going to look at the ROG of asset classes, look at the position of equities and what's going on there in asset classes and then we'll look at US, major US equities and also the DAX and the FTSE. First then let's look at the asset classes using mainly iShares ETFs. You will see there are only two that are right of the vertical here, outperforming the benchmark which is the MSCI equity index. We have got the S&P 500 on the right of it but moving down much further on the right of it. We've got the QQQ and that however is heading south-west but these are both the outperformers versus the MSCI world index. In the improving quadrant we've got the S&P small cap 600 index and then here the Dow Jones. So if you think of it in terms of stock indices we've got the NASDAQ, the S&P, we've got the Dow over here. Merging markets here, the iBox corporate bonds there, a corporate bond fund, the 7 to 10 year treasuries, the 350 index and gold, the furthest on the left but these all in the lagging quadrant and gold the least attractive of all the assets versus an average of all the equity indexes. Now on this RRG chart there's the weekly RRG with the MSCI world index again in the middle and looking at major indices versus it. So we had those three indices, we had the QQQ which is tech index, we had the S&P and we had the Dow. So how are they here? Here we have the tech index furthest to the right but again turning in here. The S&P, same position as you would expect, it is the same one but instead of having asset classes and securities like the S&P this was the ETF of the S&P. So it's moving down, so both of them are moving down. We've got the Dow Jones industrial average in a good direction here looking it's heading northeasterly it's close to the benchmark but it's heading in the right direction but still quite far away from the 100 line from the area of our performance. We've got the European stock indices down all of them in the lagging quadrant, the DAX, the stocks, the CAC and then here the Borough FTSE down here on the left. Aang Sen has gone back to its normal place down in here. So the Russell also an improving picture. So we've got a picture of the NASDAQ on the right but losing having lost some momentum. The S&P on the right too but not as far on the right so not as relatively strong but moving southward so losing upside momentum and then we've got the Dow Jones here holding up I would say is the best way of describing it. Let's look at the NASDAQ 100 first. So we've had a strong move up since November. We most recently topped out just below 16,000 but below the 16,600 high roughly high and we've pulled back to a little bit of support level which seemingly is holding us at the moment for the moment. I've drawn a Fibonacci retracement here. I've chosen this bottom not that bottom but whichever one you choose the pullback so far is quite a modest pullback. So even with this one this higher start point of 11,757 we haven't retraced even 38.2. If we were to stabilise around here then it's a very bullish thing because when the bears have control they have not achieved very much. Down below we've got the RRG lines here. Here is the momentum line which has been deteriorating and here is the ratio line and you remember from the RRG versus the MSEI world we were in the weakening quadrant and pointing down. This is a daily NASDAQ chart. We don't want to reflect too much on past glories but we got into the high of June. We had a high high and for the first time we had a lower high in the MACD. We had a bearish divergence and this set us up to be not a buyer of dips but looking out for potentially a reversal in the market which we did see. The MACD actually crossed mid-July downwards and then pulled towards it and then as often the case when it pulls away again this is the real move here and that was at the beginning of August. We came down and if you agree with me we had a channel here and very interestingly before we hit the 38.2 we burst below the channel and then it was a failure. Now when that happens very often we break out on the other side of the channel. The reason being is that people have got very short as the covering and then the breaking of the downtrend line of the upper side of the channel and this takes us out to the other side. Now we saw that and yesterday we had the boost from NVIDIA figures but very interesting that we see here this big reversal candle. We traded up two resistance from this high in here at 15,230-240. We hit that. We also hit the 200 day moving average and then reverse very sharply here and now looking weak again. So this is looking weak and we see where it is in the weakening quadrant and moving down, losing upside momentum as well. Now this does look as if we've had a rally within a downtrend and we're about to resume the downtrend and retest this low here at 14,580 and probably break it. Now I don't think this is the end of the world for the stock market but the next it looks as though we've had a down leg, a major down leg during August. Then we had a rally towards the end of August and now that rally seems to be failing and it looks like we're heading lower again in which case those of you that like that kind of thing and like to see their RSI rally to 50% and then start to fail again correcting the oversold condition because we had got a little excessive there and then resuming the move. Maybe you'd be bearish already short. Obviously there's a fairly obvious protection level here and then the next level. Where is the support after that? The next support level is down at 14,100. Quite a long way below where we are now. Got a little bit of support here but we've already breached it so probably would go if we got down there again. A bit of a set up here possibly for a short trade some of you may well already be short. Now we're looking again at a weekly chart this time of the S&P and remember where the S&P was on the relative rotation graph. Also on the right of the 100 levels so on a relative basis outperforming the MSCI world but not as far as the NASDAQ but also pointing downwards pointing south lose positive momentum. We saw it here when we saw the weekly crossing of the MACD here so it came down narrowed in during the month of August and turned down. We saw actual divergences on the daily chart which I'll show you in a second. We've come down we've had this very volatile week here we'll dissect that in a second but crucially we're above the 38.2% level of the the rally so the rise so if it were to hold here this would be long-term bullish indicate because while the bears have control they achieve very little but is it a different story in the shorter term. Now a daily chart of the S&P so here we are pulling back towards the 38.2% retracement but holding above that would be bullish but then we've rallied after the topping out with the bearish divergence all the highs in the MACD were high high high then we had lower high as we made this high here so we were ready and we talked about it on these CMC weekly updates and we were ready for the turn and the market turned even the 50 day averages cost below the 200 day average here so we're long-term bearish now the the MACD of course is also bearish now we rallied from this low here 4,336 up to this previous two highs in here and that low so it was a predictable resistance level high low resistance level that's where we got to now this is really fascinating that we have reversed so sharply now here so looks as though impulse reaction starting the new impulse and the retest of the 4,335 low and maybe coming back down here to 4,200 which you remember was a long-term resistance level on the RSI high higher high lower high bearish divergence in the RSI the RSI went deep down you could say of the soul but went right down to that reading around 20% at the low there on the 18th I think it was yesterday 18th then we rallied corrected 250% and turned down a classic behavior if we're having a reaction and then turning down again resuming the trend so we've got today this is Thursday sorry I'm doing this late on Thursday night we've had this reversal move here this this sign of weakness at some stage some of you might want to be bearish on this and you've got a very obvious protection level which is above these highs and that's low and now Thursday is high and this could be the beginning of the resumption of a move of A B C down to D 4,200 would be the count for it I want to end up by looking at the DAX and the footsie now you remember on the RG they were both in the lagging quadrant the and the footsie looking dire and moving upwards but in but further is the left in the RG now here is the DAX so this is a very interesting technical situation we had a high here 16,300 all this is hit it again breached it but immediately reversed beach and immediately reversed here and now it's come down pretty hard actually it's testing lows here at 15,465 15,484 those two lows there the MACD has already turned down it's looking vulnerable to really having quite a substantial sell-off the natural place for it to find support is from this high that high and that low so just draw this line in I think it's about here somewhere around there should be a fat line but there and that's at 16 as a 14,600 there so this is quite vulnerable it's got some momentum on the downside we are within only a hundred points of these two lows here at 15,490 and 15,4484 if they break then I think that we will be moving down swiftly I would say down to 14,600 that's a thousand points down it's already crossed the momentum is lost on the rally the rally has failed the attack on the January 2022 highs has failed and it looks as though there'll be huge disappointment which could intensify if we break these lows is there any stock index in the world to buy there's bounce opportunity in the worst-looking one on the RRG you remember the furthest on the left was a friend the FTSE FTSE is actually in now a very point of a stiff area of long-term support we've got a range from 6,900 extending up to 7,700 we are in the middle of that range look at that there this range here and we're in the middle of it and we have come down now come down to 7,200 and three times we've held it now this is a potential opportunity isn't it trying something three times at the moment on this weekly chart we've got a bounce if it does bounce it does meet resistance quite quickly we need to go through the 7,700 to release real upside energy needless to say the weekly MACD is bearish and the RSI has actually given a buy signal on a weekly basis by coming up through 35 from below this is a daily chart and you can see the MACD is negative here it has hooked around a little bit on this bounce the third attempt to break down properly through the 7,200 level it's a little bit above it to be precise it's a 7,200 7,210 7,200 would clear it so we've had a little bit of a bounce here we get substantial resistance 7,440 starting there but from a trading perspective this looks like it's holding we've got an obvious place to protect yourself if it were to break that level I think it would absolutely plummet so thank you very much indeed everybody and I hope you find today's session useful this is Trevor Neal signing off as research director of ROG research may the trend be with you bye bye