 Hello traders at CMC Markets! Welcome to a new update from RRG Research for Monday, the 23rd of May and I'm recording it on Friday the 20th just before the market opens. My name is Julius de Campanar and I'm presenting to you from Amsterdam in the Netherlands. I'm running RRG Research together with my friend and colleague Trevor Neal in the UK. Anyway let's kick off with a quick overview of what happened last week and what we can expect for the coming week. If we kick off with the view of world stock market indexes in the Chess, we're looking at the weekly RRG at the moment and be careful this is a relative picture so it shows you a relative strength of those markets, not necessarily price trends because I think we all know what happened last week. Quick look at it, what we can see is that the UK is actually doing really well, Australia is holding up well, the Japanese Nikkei index is coming in quickly pouring into the leading quadrant and we'll see some strength from the European market stocks index led by the German index and the French CAC index. Where's the weakness? The weakness is very, very clearly in the US. If you look at the US indexes then we've got the NASDAQ which is in the lagging quadrant and it hooked back down, powering further into the lagging quadrant. We have the S&P 500 index which is turning around and moving into weakening and heading towards the lagging quadrant and we now have the Dow Jones Industrial Index that is very early stages of rolling over so my view is that the US markets are the weakest, if you look at this universe that is. If we bring that to a daily RRG then we see a little bit more of a pronounced picture and here you definitely see the weakness of the US. Here's the NASDAQ, here's the S&P 500, here's the Dow Jones Industrial. These are the three indexes that are very clearly, oops that's not bad, very clearly rotating towards the lagging quadrant that's indicating that they're losing relative strength versus the rest of the world. All the greens here are the Asian markets and the European markets and you see a little bit more erratic movement that's because of the volatile swings that we had over the last week but I think the general picture here is very clear that the US is on the performing the world so that is a market where you would be looking for short positions and you can offset that with longs probably in Europe maybe in Asia. Now last week I showed you a trick where we instead of using in this case the MCI world as a benchmark for the RRG chart where we use a 0% performance which makes the RRG chart looking at absolute price and that is probably what's better in your mind. Here you see what's happening in the world right now. All these markets, all these international stock market indexes are on the left hand side of the graph which means that they are in downtrends versus the benchmark and the benchmark here is a 0% line which is a straight line. Basically we're looking at absolute price performance and then you can see that all these markets are now in downtrends when measured in price. Obviously if you're a trader in the trade CFDs you can benefit from both long and short side that's where these RRGs based on relatives come in to help you make choices and probably find some interesting pair trades. If I quickly take a look at the S&P 500 is obviously arguably the most important index in the world and we see that that topping formation has completed and we're resting at a support area around 3900. I made that a very thin line because I don't think it's a very major area of support. I think the more meaningful support levels are coming in around 3500 maybe as low as 3300. If we look at the daily version of the S&P then you can see that we had that break which was obviously the first signal and then we got a few days of a very strong rally where 4100 was going to be just above 4100 was going to be a resistance area. Old support becomes resistance but we didn't even get there. The peak came in at 4090 just below 4100 and we're now already pushing against that lower boundary. If that lower boundary that's the crucial part of 4 or 4. I think today which is Friday and I don't have that data yet but today and the coming week when you're listening to this if we break below 3800, 6000, 3800 let's round it off 3850 then we'll probably see an acceleration lower to the levels that I just mentioned but we've got to pay attention to a little bit of a positive divergence that's building up here in the RSI index, the Rathostract index and that's a positive sign that is usually a sign of a pause and a decline maybe a little rally. That could bring us back to that 4100 area possibly a little higher but if you look at the big picture of the S&P 500 I think that we can safely conclude that we're in a downtrend lower highs lower lows on a weekly basis that ain't gonna change anytime soon I'm afraid and that means that whatever we see on the daily charts should be judged as temporary rallies within the framework of a longer term downtrend on the weekly chart. I quickly want to take a look at the German market we haven't talked about the German market in our updates and obviously that's a very important and a big market in Europe. If you look at the RRG these are the stocks that are currently in the RRG momentum plus basket that's the pretty much the only basket that is showing on the performance all over a 30-day period right now but there are some things that we can learn from it especially the fact that there are a few stocks that are moving in a top right direction and that's RWE and also here you see Bayer and you see Wacker these are stocks that are moving in a top right direction that's pretty good and then we've got the stuff that's moving to the lower left which is better avoided. I've done a little bit of homework and I selected two stocks to inspect on an individual chart and the first one is obviously RWE because I think it's doing really well and then also Befeza BFSA is the ticker symbol and that's that's pointing to the north eastern direction which in generally is good but it's on the left hand side of the graph which means that it's in a relative downtrend and very often especially when they have a low reading compared to the other elements on the chart there is a pretty high risk that this is rolling over and these are the rallies within a downtrend and I think that Befeza is one of those stocks making it a good candidate to look at for a weaker performance while RWE is a candidate that is moving nicely into the leading quadrant so if we start with RWE and you look at the price chart you can immediately see why it is moving into the leading quadrant. It's already in an uptrend for quite a while and now we've just broken above that horizontal resistance area and it looks as if we're holding up quite well there and that makes RWE a very interesting stock potentially going to higher levels in the coming week. Now the other side of the coin is Befeza because here you say this is a weekly chart because I thought the daily was a little bit too condensed and here you can very nicely see the break from that broad range. This is a more than 10 euro range which is now broken to the downside and very often you can project the level of the height of that range to the below the lower boundary of that range. That brings us to an area around 45-46 maybe even lower but I think that 45-46 could be a good target area because that's a nice area of support which is formed by peaks that were set in 2018. So a major break for Befeza while RWE is breaking higher to German stocks looking to to be set for a nice move higher. Thank you for watching I hope you enjoyed the show and I'm looking forward to see you again next week same time same place.