 Welcome, traders, to today's live analysis session with me, Patrick Munnally. I'd just like to do a quick audio check. If you can hear me loud and clear, you can type a Y in the chat box. And you should be able to see on your screens a tip mail we want traders to succeed screen. So I can just get a Y in the chat box to confirm that you can hear me. Good stuff. Okay, let's, before we get going in terms of looking at today's analysis, first of all, we want to remind ourselves of the risks involved in trading, which are substantial. Also that any of the views or opinions expressed today are solely mine and they don't represent the organization or company of Tick Mill in any way. I'm an independent market expert in residence for Tick Mill. So just to give you a heads up of where I'm coming from, I've been trading for the past 15 years. The first couple of years were really meddling in the markets after I exited a consulting startup that I co-founded. I cashed in my stake during a merger and had a bunch of time on my hands and some capital to play with. And I started exploring my passion for markets. I'd had a front row seat to the dot-com boom and bust, seeing people lose and make fortune in the markets overnight and started to, like I say, really meddle. Gambling is probably more appropriate for what I was doing in those early days. And I actually experienced a pretty significant six-figure loss, which fortunately for me at that stage wasn't terminal, but it was a wake-up call and I decided to really get serious about trading and to treat it as I had done with other commercial endeavors as a business first and foremost. So I sought out a mentor, someone who had basically demonstrated excellence in the field of trading and someone I could model their behavior, which is ultimately what I went on to do. I worked with my mentor for 18 months, two years really, in developing not just my technical game, but more importantly my mental game. And so by the time I'd finished that process, I had a fully documented trade and business plan. I had an extended back test and forward test. And so at the stage that I returned to the markets, I was fully prepared and actually started trading what I considered to be professionally in 2008. And obviously the volatile markets not too dissimilar to what we've witnessed just recently in our current market conditions. And since then on an annual basis, I've been profitable and really that's how I focus in terms of my performance. I'm not concerned about the outcome of individual trades or even a group of trades. What I'm focused on is the next hundred trades and whether or not my edge can demonstrate itself open extended series of outcomes. So that's how I approach trading now. It's not I don't live and die by the outcome of individual trades. And since 2013, I have actually been running a managed account service, managing external investor capital that started out as friends and family and it's grown organically from there. The results you can see on the screen are the annual and monthly returns for my performance since 2013. And really what I've got to now in my career is that and my approach to trading is that most of my trade execution work is basically done at the end of day. I've primarily focused on trading the daily timeframes. And so I have a bunch of time available during the day. I'm obviously monitoring markets, but I don't make any or the majority. I would say the vast majority in terms of 90 plus is end of day execution. There are times when I do trade on the intraday or lower timeframes, but it's it's mainly end of day stuff. And so I have a bunch of time my hands and obviously I have a quite an extensive experience in the markets and that has led me to be involved in some additional projects. One obviously is the tick mill where I'm the resident market experts. I provide daily market outlooks and chart of the day, specifically interesting setups that I'm tracking in the market. And you can you can sign up to receive those into your inbox on a daily basis. I'm also the head of trading and trainer education for an emerging trading education firm called FX career swap, whereby we take retail trading talent, we develop it. We we underpin their learning with 21 interactive modules. And then I share 10 of what I call advanced strategies that that have proven profitable for me over the past 15 years. And we look to build up individual traders. They then go on to manage the firm's capital at zero personal risk. And because capitalization is really one of the things that hampers the development of of retail traders. You can have an excellent trading plan and excellent risk management and you go about executing your plan. But when you're under capitalized, your returns, you know, even if you're hitting 20, 30, 40, 50 percent a year, which are excellent risk adjusted returns. If you're only trading a thousand pound account, that isn't going to add up to a whole amount of financial gain. And so it makes it makes it difficult for traders really to to adhere to risk management strategies that allow the professionals to to perform and develop. So what we do is we're trying to help traders overcome that capitalization hurdle. And once once they've been through the education process, we underpin that with with the funded accounts. So those are a couple of the different projects I'm involved in now. But first and foremost, I'm a trader and that's where my main focus is. So I want to just bring it back really to some of the charts that are or some of the market dynamics and themes that I'm I'm watching at the moment. If you've been following my intraday, if you've been following my Tick Milk releases, you'll note that I've been I've been constructive once we had the panic low in place in the S&P 500 that I started to get constructive on that in the near to to medium term. And there are a bunch of indicators that were suggesting that that we could see a certainly a tradeable low in place, whether or not we've seen the low is obviously subject for debate. And it's, you know, we were looking a minute at the technical setup that would suggest that we may have to do some further testing on the downside. These are some of the supporting charts that I've been using to to guide my view in the market. This is the VIX, the volatility index. Once we had that peak in place similar to what we saw in 2008. That's when I got the sense and certainly the technical setup on the charts was suggesting that we could see some near term upsides in the S&P 500. And what I'm ultimately looking for now is I'm looking to define some of the key areas on the charts because what I know from experience is that even in bear markets and we were in a bear market, we're currently just on the on the verge of getting back into a bull market, ironically on the S&P 500. But even in bear markets, we do see some some pretty extreme and certainly tradeable rallies. And you can see here, this is through the period of 2008, you know, we had a couple of 20% rallies and we've seen a, well, we've exceeded 20% now in this current rally. And so certainly now what I want to be thinking to myself is where are the next opportunities in terms of near term trading opportunities? This is a note from Goldman Sachs Prime Brokerage whereby earlier this month, you know, these the CTAs were basically selling into what was this this prior rally, obviously getting squeezed about that selling or shorting that obviously taken as it often does taking the markets higher. So if we look at the S&P 500 now, this is the S&P 500. So what we're what I'm looking at from a technical perspective is we've got we've got this decline that we've witnessed through to the March 23rd low. And now there are a couple of key areas that I'm looking at on the way back up as what I refer to as decision points. When I say decision points, what I mean is when the market tests these areas, I'm ultimately looking for price to inform me as to whether or not this decision point is expected of being or being the cause for a potential reversal in the current mood. So we've had the initial impulse leg off the low and the other tool that I use is the extension tool to help frame the status. So we've had that as our impulse move off the low. We then had a correction that completed here. And so now I'm able to quickly see a couple of key areas that I want to pay attention to. The first one is the 50% retracement and the equality move. When I say equality, what I mean is this leg here that we're currently moving to the upside will ultimately as a minimum requirement will be equal to the initial leg of correction off the lows. So we've got impulse move, corrected pullback and now we're trading up and what I'm looking for is a minimum test of this 2789 area with the quality confidence just above at 2889. So it's 100 S&P points. Now when I'm trading the S&P, I'm certainly not involved in trading the intraday time frames. I'm ultimately looking at the daily time frame. So risk adjusted obviously for volatility. I'm more than comfortable with 100 point range watching for potential reversal patterns in this area. Now what I'm immediately drawn to as I'm watching this price action develop is I'm always looking to or paying attention to prior phases of price action for similarity to emerge in the current swing. What I can see here is if we just overlap this leg here all the way through to here, we can see that we're starting to, there's some similarity here in terms of this move. So again, we just have to pull things in here, but we can see that there's some similarity. We tested into a double top here. And now what I see is the potential for a pullback. Let's just draw this in so we could get a pullback into this area. And what we've got to remember here is that we're trading we're about to head into a holiday weekend. It's unlikely that traders are going to want to take too much risk into the weekend because what we've witnessed over prior weekends, the last weekend was the first weekend we didn't really see it. And I hallowed that to my team that we didn't see a gap down last week. And so that's suggesting there is some underlying strength in the market. So what we could see here is a pullback before we get this next leg of upside. So we could get something like this. Maybe we test into the equality move from there. And then we get a decision point. Now, when I say again, when I say decision point, what I'm talking about then is a signal, a reversal signal. And for me, what I'm looking at are the daily charts. And I have a defined strategy. I use a near term volume wasted average price to give me a signal in the markets. So I'm always looking for, if I'm looking to be sure the market, I only see a red candle. What the red candle means to me is that price is closed below the near term volume wasted average price. And that suggests a change in market behavior or potential change in market behavior. Now, I'm not looking at every reversal that occurs every time a candle flips red or green. That isn't a biocell signal for me. It has to be in specific areas on the chart. And one of those are the volatility support and resistance balance. So these are a 20 period look back and highlighting where we have a statistical chance at least of price pausing and or potentially reversing. So in this instance, I'm looking at the 2790 to 2880 area. I haven't quite come in there, but we've come close. We're testing what is the equivalent of the monthly VWAP and we're seeing a little bit of a pullback here. So from a trading perspective, if I was going to look to do something on the short side at the moment in the S&P 500, what I would need to see would be a close today back below this VWAP. So ultimately what I've been looking for is what's often referred to as an engulfing candle. So if we've got a close back below near term volume wasted average price, we've come within if we look at the high of this candle, the high was 2773 and we're looking for 2786 on the nose to be the 50% pullback. So that's pretty close in terms of training opportunities. So if we did get a reversal, a various reversal today, obviously the market's going to be closed tomorrow for these two holidays, but if we come in on Monday or Monday, it's bank holiday in the UK, I don't know, probably across Europe as well, but I think the US is open on Monday. So I'd be watching if we do get a reversal here, then what we might be getting is the sense that this correction is either going to complete or it's going to become complex. When I say complex, what I mean is that we can have more than three waves in the correction. We could have a five wave correction. So what we could be setting up for is an equidistant pullback so we could see a correction back into this 2533 area, which is just equal to the prior correction. So at this stage in terms of suggesting a near-term change in the near-term trend, which is to the upside at the moment, that wouldn't suggest anything meaningful because what we could see from there is simply set up for another bigger leg higher, which would ultimately put us up into the next resistance zone. Now if I go back to this chart, so if we overlay, I'm using this because it's clear for you guys to see, but like I said, I'm looking at the daily chart of signals. So let's just bring this in here. So we could get this type of pullback and then what we'd be looking for is the prior whole move up, which would be this, to replicate over here. Now, why is this area significant to me? Well, this area retains now, it's the 78.6% replacement. Most corrections, the majority of corrections, note I don't say all corrections, I don't use definitive terms when talking about the markets. The markets are by their very nature ambiguous. What I have is a methodology for framing data which has a high probability outcome or there is a higher probability of one thing happening over another. And that's all I'm looking to do, I'm looking at the probabilities, but if we see this type of pattern, then we'll be trading into the 78.6% retracement and this will be the 161% extension of this initial leg versus the current swing load. So I can see this, you know, there's clearly a map here in terms of markets that could lead us up into this 31, 38, 31, 65. So that's giving us at the moment about a 30 point window, which is clearly pretty tight. But let's just see if in terms of, if we look at some channeling here, so we have this channel in play. So if we don't roll over and take out yesterday's loads today on the close, maybe we have a more shallow pullback that brings us back into these prior two tops here. So we get a retest of those as prior resistance, initial support, we get another support hold here. And again, that still sets up the potential for this further leg higher. And even at this stage, this would really probably be my line in the sand with respect to a bearish decision point in the market. From here, we can still get the setter that would give us the second leg of this move down. So, I mean, we wouldn't, we still wouldn't be out of the woods from a technical perspective. We could still get another leg lower. And I wouldn't, in terms of that move, I wouldn't anticipate that it would be as sharp as this first move. They're often not, what we like to see is more of a grind, a steady grind lower, which would take us back down towards this 2000 area. So this is what I'm looking at in terms of the S&P 500. Again, unless on the daily chart, we're going to take out, if we look back here, this is drawing the line. So we've got a line in the sand. So on the daily, you know, on today's close, and then we're going to take out 2610, let's say. So, you know, that would be a 160 point reversal, be meaningful reversal, certainly. But unless we do that, then I would, I'd still remain constructive on the futures. But if we did do that, and certainly what we'd have to consider is the potential that we could be starting the next leg lower, or certainly a test of lower levels. The logical place that we test next, we'll be back into the 2420 below there. We'd be looking at a retest of the load, and if it fails to find support there, obviously, we've got targets to the downsides. So that's what I'm looking at in terms of the S&P 500. For me, it's the major risk market gauge, and it's the index that I trade when I'm looking to trade the indexes. So that's the first chart I wanted to make you aware of today. And the second one, go back to the slides here, is the dollar index. Now, obviously the dollar index is the major counterparty to most foreign exchange trades. And so I always want to be cognizant of what's happening with the dollar index and what the potential moves might be, because that's where you can get set-ups for the really big swings in the market. And I believe we're at a significant inflection point with the dollar index and one that could have a meaningful outcome. This is data going back to 1975, and you can see that the dollar has tended to move in these big swings broadly six or seven years to the upside and nine to 10 years to the downside, where we've exceeded the cycle on the upside, kind of in line with the excess that we've seen in terms of the bull market in stocks, we've had the longest bull market in the past 11 years, and the dollar has slightly exceeded the seven-year move, but I have another chart here that will give a better read. We have actually a 16-year cycle in the dollar index. This is highlighted by Goldman Sachs here. This is going back all the way to the 60s. So you can see we have a 16-year loop in terms of the dollar index. Meaningful swing highs tend to occur in and around the 16-year period. And the last one came in 2017. We still haven't exceeded the 2017 highs. So you can see in this prior cycle around the dot-com boom, we did once we put in the original high, we did kind of trade a bit higher, but then that meaningful dollar move to the downside occurred similar here back in the early 80s. Similar type of move got the swing high and then exceeded it marginally before trading lower. And so what we've got really that's potentially driving this move or that could drive this move is the vast liquidity that's being supplied to the market by the Federal Reserve. So in order to combat the dire political circumstances surrounding the pandemic, the Fed have had to unleash a significant amount of liquidity, far eclipsing what we've seen by other central banks. And that vast sum of US dollars is at some point more likely than not going to weigh on the dollar index. At the moment, it would appear there's about 60-day lag in terms of the dollar index and the liquidity that's being pumped into the markets. So we've got some underlying flow in the market and positioning that suggests that we might be seeing a major dollar index. This is the later CFTC data and we can see here that we're getting some divergence in terms of each time we're making and this is the white line represents price. The white line represents price and the orange line is the positioning flow as per the CFTC speculative futures positioning. And what we can see is that prices continue to make highs here, but we're making significant lower lows in terms of the actual support in the market for those highs. We had a similar circumstance occur in 2017. We had this peak which was supported in the futures market. Then we tried to make another high that the futures and the positioning said no. And then the ultimate top came here and we can see we have that third divergence in terms of positioning flow not supporting high prices. And we can see we're in a similar situation here and we've got the potential to put in a very meaningful double top here. And from a flow perspective, we are not seeing the price support for dollar market. This chart is a seasonal chart. Here we have the 20-year seasonal average movement for the dollar index and we note that April tends to see a high in the market. We can certainly retest those highs, but what we tend to see is a lower high in the summer months before seeing a real dropaway in terms of the dollar index. So that's some of the background dates. If we move to the charts now, this is the monthly charts of the dollar index that I've shared before now. We tested this trend line going back for it's a 20-year trend line. We chopped up above it last month and rapidly closed back down below it. We're now potentially seeing, well obviously we've got a few weeks to go in terms of this month, but a second close below that trend line would suggest that the dollar bulls are certainly running out of steam. We can actually take a look at it. Here you can see the, let me just move this. This is the bigger, this goes back to that 85 high that I showed you on the other charts. Now if we do get a close above, for me it would be close above this 104 area. If we close above 104, then using the same analytics that I've used in terms of the S&P 500 except obviously we're on a monthly chart here, we would have a confluent target back up towards 120 in the dollar. So although I'm certainly cognizant of the downside risks to the dollar, at the end of the day, as I say to all the guys I work with, price is the final arbiter for me and I follow what price does. I want to be aware of all the dynamics that are in play, but ultimately it's price that's going to leave things. So like I say, if we do see a close above this prior high here, so we have 103.82, close above there would negate this idea of a double top, take out the trend line and then the next upside objective would be this A, B, C, D move and that would take us back in to a retest or to test the 50% retracement of the decline from 1985 all the way through to February 2008. So I want to be mindful of that potential setup as well. So whilst in the near term, I'm certainly looking for a potentially embarrassed dollar set ups and also cognizant, I've got some lines in the sand with respect to where that thesis will run out of steam for me and then we'd have to be looking at upside targets and certainly repositioning in terms of my trading and what I'm looking for in the markets. So it's important as traders that when we're doing our analysis, we don't come to the market with bias. We're assessing from a point of balance, from point of a no bias, just simply looking at the technical patterns that are setting up. And so at the moment was this trend line holds the technical pattern and the seasonality and the flow in the market would suggest that we could see downside in the dollar. But if for whatever reason, let's say we have another downturn in terms of the optimism with respect to dealing with the global pandemic then we could see another rush into dollars and if we do start to drive meaningfully higher then we've got some upside targets that we'll be looking at. But like I say at the moment for me, I'm looking for the bearish set ups in the dollar and what I've got are a couple that I'm watching at the moment. I'm looking for a break of this outside reversal candle. We had a bearish insight to yesterday. Downside break here through that weekly pivot for me is going to be a short position and I have a set up here that if we get that move I've been looking for a move down to the 94 area. So getting short below the lows of that candle so 96, 80. Looking at shorts 96, 80 I'll be putting a stop just above 97, 50 areas are risking about 70 pips to make about 250 there and I'm looking for some of the set up I've been looking for. So what I've been looking for would be this type of move could extend, could certainly retest the lows but initially this will be my objective an equidistant swing. So just to highlight that for you here. So looking for the break there stop just above those price and you can see that from a risk reward perspective you're getting into four times your risk which are these are the type of situations that we're looking for as traders have a similar scenario in the euro dollar come into potentially an inverse head and shoulders pattern here and what I've been looking for to be a long position obviously it traits inverse to the to the swissie so we can see a break of this outside reversal candle and then my target is going to be the A, B, C, D objective so again I'm looking for a move up into this area you get a 3.69 risk reward ratio now if this dollar starts to really roll over and we start to see a significant shift in terms of market sentiment then we could certainly retest highs and then we've got confidence back up here at 115 so I want to be cognizant of the bigger opportunities but my initial objectives and my risk reward ratio is all stacked up there for me so it all makes sense in terms of risk reward that's what I'm focused on and that's what I tell the guys I work with in terms of my trading teams is that no matter how good the setup is the risk reward has to work and it has to be a realistic risk reward and so always what I'm doing in terms of identifying profit targets is I'm just using prior swing so I'm not getting in here and thinking right the euro is going up to 180 it could do but the probabilities of that happening in the near term are pretty slim so what I'm doing is setting realistic objectives in terms of price swings for my targets so that's what I've got there in the euro I was also looking at some other you can see we've got a similar story here in the Singapore dollar similar setup that will take us back in the East for our highs I had a couple of great trades in the Singapore dollar and then not such a great one I tried to get long here off this bullish outside candle it looked like it was starting to work but then as we came into this week it rolled over and I got stopped out on that one but had a couple of great trades it was long down here back into this double top and I shorted back down into these lows those are trades I shared with the team in real time and you can also follow me on TradingView I'll post a link for that link I try and share as much as possible there but it's not always feasible in terms of the time to get things posted but Singapore dollar setting up we've got the loony now obviously the loony you've got a slight fly in the ointment in terms of the loony setup which is the OPEC meeting that's due today and the back and forth with the perspective cuts etc so the price is not likely to be as clean but you've got a similar type of setup the Aussie is starting to break out now if we can see closes we've got to close above this prior resistance see targets now in the Aussie up to 66 which would be the ABCD pattern if we bring in the Fibre Tracement tool from the prior highs into the lows there we go we've got the conference there at 78.6 so once we're through 62.80 in this Australian dollar for those who trade intraday or looking at short-term setups then there are valid targets now developing in the Australian dollar for a move up into this area and from there we'll see another decision point in terms of the markets but certainly there is opportunity on the other side in the Australian dollar what else am I looking at I think really still you guys that's all that's on the cards for me at the moment so I'm looking really at the in terms of the daily setups I'm looking at the Euro I'm looking at the Swissie and if we look at the dollar index you can see we've got a similar pattern in terms of the dollar index this is the Dow Jones dollar index it's made up of four other pairs it's the on an equal weighted basis it's with the Australian dollar the Sterling the Euro and the Yen you can see we're seeing a similar type of pattern emerge as those major dollar that we've just looked at so we have an A, B, C, D scenario that's looking for this to ultimately break down so whilst we hold this area this 127 as resistance then we can look for a move to 122.60 on the downside then again that's another decision point for the market because once that corrections you know if this is just a correction or certainly then we can see another surge higher to take out his prior highs or this could be the start of a more meaningful decline to the downside so Swissie and the Euro are on the book I'm watching obviously the S&P 500 we'll see where that's going to close out today just be cognisant that we are heading into a whole day weekend and slightly people will look to cover positions late in the day so you might see some end of day volatility there okay that's that just about wraps it up for me at the moment guys are there any questions anyone like me to look at a chart or any other questions with respect to the market happy to answer any of those now you can type them in the chat box if you just type a no in the chat box so that I can see everyone's everyone's satisfied with what we've been talking about and understand what I'm looking at good stuff thanks very much guys for taking the time to tune in enjoy as best you can the holiday weekend and I'll be back with you again next Thursday in the interim if you want if you want to find or follow any of the trading ideas that I post you can do that through the trading view account I'm trying to find let's see here so it's trading view is FX career swap and you can you can follow my ideas there during the week if not I'll catch up with you guys next Thursday so take care and have a great weekend