 Well, I think that says it all really six negative six. Okay. That's a bad number, right? We'll talk about that in a minute What I'm going to do now Well, I'm going to get this webinar started So welcome ladies and gentlemen to this preview of the FOMC September FOMC rate meeting for the Federal Reserve with me Michael Houston and my colleague Colin Suzuki in Canada and we're going to look ahead to This this this evening's meeting to try and get an idea of what the likelihood is that the Fed may raise interest rates later tonight Just digest the risk warning have to do that for compliance purposes But once we get the risk warning out the way we can pretty much get cracking and look at them look at the likely probable outcomes of This evening's meeting because I think this meeting is going to be pretty much unlike any other meeting No one can really call which way the Fed is going to go tonight. I have my hunches I think my hunches have been well documented so far this year haven't they Colin? I don't think both of us. Absolutely. Yeah, this has been quite a point of discussion for a while It's to when were they going to start raising interest rates because we've all been looking for it for the last year since Tapering ended the big question has been when would they start interest rates and then and start raising interest rates And then when they did start tapering was finished tapering was right when the oil price collapsed And then and then inflation went down and that that I think has thrown everything out of whack But but now it looks like we're people are looking to for the Fed to start getting back on track Or when the Fed will start getting back on track I guess that's a big question and this is a big question and the thing is the bond markets telling us a completely different story to The Fed funds markets because we can certainly see with this chart here the two-year yield is that its highest levels This is the price chart. So the prices move inversely to yields This is a one-week chart if we go all the way out to a month. We can see right here The last time that yields were this low is back in 2011 so we are you know in the completely the bond market is definitely folks Back to ring in a distinct tightening cycle to the only problem surrounds as to when that tightening cycle takes place This gives you another indication of the way the markets are thinking Let's look at the Fed funds If I can remember it, I think this I think that's the right one actually Fed funds I think it's WIRP isn't it WIRP There we go. So there's a 30% probability of a move in the Fed funds rate later tonight So Fed funds are basically not pricing in a rate hike And even in October it's 42.6 probability yet the bond market is basically telling us that we're going to get a rate I hate right If I could just add something there Michael I think the US dollar with the big run it's had has been pricing in a rate hike since about March Because it went up it rallied huge in the merchant and it's just been holding steady and I think people in currency is the same thing I just kind of been waiting for it to happen And I think that's borne out by I think the client sentiment because certainly if we look at our client sentiment on euro dollar 81% of cash positions is short euros longer dollars So I think the market is still expecting some form of tightening later this evening And I think that's wrong And I think Colin you do too even though you expect a rate rise this year You don't expect it tonight So that's correct I find it really interesting because you and I both have been For most of this year Michael has been leaning more taking more of a dovish approach And I've been taking more of a hawkish approach and in the case of this meeting We've both come to the same place from different directions So do you want to go first or shall I? No you go mate Okay so my feeling has always been through most of this year That the Fed would signal a rate hike before they would actually do it That they wouldn't surprise the market and that they would use their forecasts of GDP and inflation and Fed funds And an employment to signal when they were going to start raising rates And then probably do it at the following meeting And so today we get the member projections And my feeling is that the Fed will probably not raise rates But that they'll signal an October increase by raising the GDP forecast The Q1 and Q2 GDP numbers for the U.S. have both been revised significantly upward From the initial reports And yesterday we had the OECD raising its GDP forecast for the U.S. to 2.4% from 2.0 So this needs to appear to be set for the Fed to use that as a signal That they'll be ready to raise rates probably at the October meeting The second thing I'll be watching for is member descent in the voting The permanent members of the Fed and the New York Fed President Don't usually descend or stray from the party line But the rotating regional presidents often do The Richmond Fed President Lacker recently had given a speech that was quite hawkish Essentially saying it's time to start raising rates So I think if they don't descend to help He's got the duck hawk scale on the screen Yeah, so he's, oh thank you So he's very quite in the, definitely full on in the hawkish camp there Which Michael is pointing out And if any of the others join him Which would be either the Atlanta Fed President Lockhart Or San Francisco Fed President Williams of the two I think Lockhart would be more likely than Williams And if you did get a surprise rate hike today You would probably see a dovish descent from Chicago Fed President Evans Who's been basically for the whole year Evans has been saying I don't want to see a rate hike until 2016 And I think Dudley might join him Permanent member because it is coming earlier today I think it's also important to state that Dennis Lockhart Actually said I think about the beginning of August That the bar to not raising rates was quite high But that was before all the volatility that we saw in August The Chinese revaluation So we don't actually know whether or not he's moved on that view So he could actually also potentially vote for a rate rise It's hard to actually position for Mr. Lockhart Because he hasn't actually said too much Since he made those comments all the way back in August He certainly will have plenty to say for himself next week He's slated to speak three times But ultimately we're not really sure whether he's had to He will have rode back from that Sorry to interrupt Colin But I just wanted to get a flavour of what the various policy makers have been saying And Jerome Powell I thought made some comments as well But I think what really threw the fly in the eye Was Stanley Fisher's comments to Jackson Hole When he suggested that inflation might not be A factor that causes them to hold back Agreed and he said a couple of interesting things At Jackson Hole He didn't specifically point to a rate increase But he basically had two things I found interesting from him One he reminded everybody that the Fed is focused mainly on the U.S. They consider themselves to be the world's premier central bank And they expect everybody else to kind of fall in behind them And the other one was, as you just alluded to He also said the Fed looks farther out And that they're not going to wait for 2% inflation Before they start raising rates Which also was quite significant He's kind of going back and forth In the early part of this year Was definitely leaning more dovishly So he seems to be swinging back And as the Vice-Chair in considering a stature and experience If he's starting to move then you would think Other people would probably fall in behind him This brings me back to the July statement Colin Let's look at the July statement In particular this line that I've highlighted here Now if you look at the beginning of that particular sentence This is the committee anticipates that it will be appropriate To raise the target range for the Fed funds rate When it has seen some further improvement in the labour market Okay I think we all agree That we've seen some further improvement in the labour market And he's reasonably confident that inflation will move back To his 2% objective over the medium term Okay since that statement came out Inflation has actually fallen from 1.7 to 1.2 So could you argue that the Fed is reasonably confident That inflation will move back to its 2% objective Over the medium term I think that if they get out a jail free card If they do nothing Because inflation has come down Furthermore in the June statement There was a reference to a stabilisation In energy prices that wasn't in the July statement So that again suggests to me that there are concerns In the EFOMC about the lack of inflation We're not only just seeing this deflationary effects In oil prices, we're seeing it in milk prices We're seeing it in sugar prices We're seeing it in wheat and corn prices as well So it's important to understand This is not just an oil story It's a gasoline story It's also an agricultural commodity story Now that's not to say that these deflation or disinflationary effects Will continue a conceivable period of time But the point is can the Fed be reasonably confident That inflation will move back to its 2% objective Over the medium term I would say no Which is interesting because I lean towards yes And there's a couple of things I think a lot of the impact from the slowing in China Has already been priced in it And the one that I look at is that we're starting to lapse Over the next 3 or 4 months Say 6 months We're going to lapse the oil price crash And then we'll get a better idea of where inflation is actually at So the big deflationary effect of the oil price crash From a year ago And the year over year numbers It starts to go away And it's interesting because I've been doing some research here on El Nino And what it's showing Is that in El Nino years You had a huge summer decline in commodity prices That then bounced back in the fall So it'll be interesting to see over the next month or two What starts to happen with commodities And I'll have a little bit more to say on this in a week or so As I get all my numbers done I am working on something on that So you'll be posting that on the website And the clients can have a look at it Yes, actually probably in a week or two Once I finish all my research and write it up But it's another reason to think that For the Fed to give it another meeting or two Would be that in my opinion Is that because of the decline in commodities Because of the volatility we had in China And it's only been about three weeks Since that started to subside a bit It wouldn't hurt for the Fed to give it one more meeting And make sure things are settling down before they go It'll be interesting to see whether or not they still think The inflation is transitory Because it's transitory for the past three years I don't call that transitory I call that a trend I hear what you say about oil prices Rebounding and what have you I think in 2008 and 2009 We got a ten month time lag here in the UK From when inflation bottomed To when it actually started to turn higher again Sorry, when oil prices bottomed And inflation turned higher again I certainly think in that context There is an argument for suggesting That inflation might come back But only if you believe the oil prices have bottomed And don't believe the case that Goldman Put earlier this month That oil prices could go to $20 a barrel Now they did say that it wasn't their base case scenario But none the less I think you do have to be aware that While we stay below between $50 and $60 a barrel The rebound in inflation Is probably going to be tepid at best Yes, exactly I'm just thinking more in case that the deflation fears Will probably subside But I don't think you're seeing Rising headline inflation on the commodities Although the one thing that did intrigue me Michael this week was on Tuesday When you looked at the wage numbers For both the US and the UK were above 2% And rising which I find interesting Because wage inflation is stickier Than commodity inflation Yes, that's absolutely right And certainly UK wage growth Was really did surprise to the upside And actually you could argue that The Bank of England was probably Probably better got off getting ahead of the curve And hiking before the Fed Certainly if those wage growth numbers Are anything to go by You've also got to tie in the fact That these central banks have an inflation mandate They're missing it by a mile Inflation doesn't appear to be a problem at the moment And I've heard all the arguments About the fact that they need to Basically hike before they get ahead of the curve Or before inflation gets out in front of them But they've been saying that for the past Three or four years there's been no inflation And the last time a central bank hiked Because they were concerned about inflation Was in Japan and they've been in deflation For the last 20 years Then you've got Jean-Claude Trichet Arguing that the Fed should hike rates Well I wouldn't really want to be taking advice From a man who hiked rates in 2011 In the midst of a full blown sovereign debt crisis If I'm honest It could go either way Personally I think we've both agreed That the likely outcome is a hold But let's say for example If the Fed hiked They'd have to somehow control the upward momentum In the dollar Do you think you'd get a dovish statement? Very one and done Yeah because I think for 2015 Regardless of which meeting they do it I think they're one and done for 2015 And I think they would bend over backwards To make sure that everybody knows That they're not That they wouldn't be planning on doing anymore I think they are one and done for this year But how can they guide on that Because essentially you're They'd go really dovish on the statement And then I think they'd raise The talk about inflation and stuff Right Because you're almost pre-comitting Aren't you? Yeah I don't think they would use words Like one and done I think that they would raise it And then go really dovish in the statement And leave it open to And probably bring up stuff like Whether it's inflation Or the volatility In the world markets and in China And bring all those other Other dovish signals out Okay Someone's trying to ask a question I'm going to try But they're not using the chat facility So I've just sent a message out To any of you who want to ask a question It's gone to all attendees You need to respond to that The person who still can't hear me Can you just confirm that You can hear me now Obviously if you can't hear me You can't confirm But it would be nice if you can That you can confirm that you can That would be useful And I'm sorry for the message That I sent to you privately Questions here if you want to ask a question I'm meant to send it to everybody Not just to you personally Okay so a dovish statement So it would be We still remain data dependent It's unlikely we'll act again Before the end of the year But we will Something along those lines And as I say probably bring up Concerns in the statement About low inflation And volatility In other countries With probably me not mentioning China specifically It'll be international developments Who usually is That's code for China Normally Okay so And if they leave rates unchanged Do you think we'll get a hawkish statement Yes I think if they leave rates unchanged They will get a hawkish statement Where they'll probably say data dependent Looking towards raising interest rates this year Well the raising rates this year Would probably come either from the From the signaling from the GDP Or from the descending vote In the vote count Is my thinking I don't think they're going to move the needle much Or the employment forecast Although the other one that will be interesting Will be the dot plot Which I'm expecting is going to pretty much Coalesce around 0.5 this time I'm actually on the dot plot More interested in 2016 And what they're thinking now Because everybody that's kind of talked Has talked about their glide path And where they're going to go from there So I'll be quite interested in seeing Where that shakes out Because when I looked at the last meeting It varies from like 1.75 to 3 So I think they're going to have to Other dot plot's really relevant Colin I mean I look at the dot plots And if you'd looked at the dot plots Over the past two years You'd have been well wrong Yeah absolutely I think they're just kind of an indication Of sentiment But one thing that we did get over 2015 Was that As the economy particularly Went soft in the first quarter The dot plots all started coming down And did tell us as you would forecast That the Fed would be holding off longer On interest rates than people were thinking At the beginning of the year So at the beginning of the year Everybody was seeking like a march rate hike And you were looking much later We're in September And we're still not sure Sure Which begs the question When we got that China data And we saw that very poor industrial production data People are pushing a rate hike out to next year Now I'm not that confident About next year And certainly in terms of timing But I'm probably less confident About my no rate hike this year Than I was But I see no reason to change my mind To September And I'm holding December open really Because I think If they're going to act in October They're going to have to pre-announce A press conference And at the moment There's no press conference scheduled For October And Janet Yellen Is actually due to give further speeches Next week And there's a whole host of Fed speakers Speaking between now and the end of the month So you're going to get an awful lot of Fed noise Irrespective of what the Fed does later tonight But I think I speak for all of us When I say if the Fed holds tonight We're going to get another Five or six weeks until October And then another five or six weeks Of what the Fed is going to do What the Fed is going to do I'd be quite happy not to hear about the Fed For at least another two weeks after this Which actually raises the other interesting argument Because so many people are fixated And this was kind of anecdotal stuff That came out of Jackson Hole as well Apparently some of the central banks Were telling the Fed that Because everybody is getting so fixated on it And people are expecting it And the only question is about the timing And maybe they should just get it over with That's true But you can't really set policy on what markets think You have to set policy on what is best for the US economy Absolutely And what's best for the global economy Now in 2006, 29th of June 2006 The Fed hiked rates Inflation was at 4% Monetary policy conditions are completely different now And so is the Fed's role The Fed's role is completely different now We've had a financial crisis In the intervening years The Fed is not only the US central bank It is now the world's central bank Whether it likes it or not And if it makes a policy mistake today That policy mistake will come back And bite it in the backside So it also needs to be very, very cognizant Of its role there Irrespective of the political shenanigans Going on in Washington There's another factor that we need to bear in mind Debt ceiling Debt ceiling, government shut down Beginning of October If there is no agreement between Republicans and Democrats Then the US government may not raise the debt ceiling At the end of this month Is the Fed really going to hike While that question remains unresolved Probably not It's the stage of the week for October We've been here before A couple of years ago When they delayed tapering From September to December Was around that as well Around a budget crisis That's certainly a reason for them To want to hold off until October That's the end of October By then it should have all blown over I think the general consensus is That we'll probably end up with an egg over our faces This time tomorrow morning Or later this evening Even we think that the balance of probabilities Suggests that the Fed will do nothing This evening But it all then depends on Growth upgrades Inflation forecasts And dot-plot glide path Now they've downgraded GDP twice this year Once in March, once in June They've downgraded inflation In March They left it unchanged in June It'll be interesting to see what they do With the inflation forecasts this time Because of the declines that we've seen Over the past two or three months Do they keep them unchanged? Do they adjust them higher? I think they could push down 2015 And maybe hold 2016 flat Or increase 2016 and push down 2015 They could certainly do that That's what I would be leaning towards So in a way that could be interpreted As slightly hawkish But slightly further out Agreed I think we're running a risk of inflation Picking up quite significantly in 2016 Despite high debt levels Yeah, that's surprising Just because I think the oil price alone Lapping the oil price will probably At least pull it up off zero And then who knows how far it'll actually turn higher Depends on what commodities actually rebound Let's look at oil prices I was looking at Brent's chart A couple of weeks ago I did a video on this And on the weekly chart We posted a bullish reversal But thus far we haven't really Made any progress higher We've declined pretty much Two to three weeks in a row We've got lower lows And we've got lower highs We're not over yet But we haven't actually been back To the levels that we saw At the middle of August So at the moment this bullish candle Is still very much valid In terms of a potential move higher So this is something that I'm keeping an eye on Because when people like Goldman Talk about $20 oil price I look at this chart And basically it just doesn't square Because when we saw a bullish candle here In the beginning of 2015 We did get a nice little rally higher Unfortunately what we didn't get Is a similar one here Apart from a spike up To around about $53 a barrel Now we've drifted back to around about $45 But nonetheless While we're above These sorts of levels here The risk for a short squeeze Remains very, very much acute I think And the same sort of thing Is prevalent on the WTI chart as well So that's something to be aware of Yes, people are talking oil prices lower But the charts are warning me And warning you as well That there is potential That we could squeeze higher In the short to medium term When you get a strong rebound Of the manner that we did like that It suggests there's an awful lot of interest To push oil lower It's a bit of a crowded trade When a trade becomes a bit crowded I start to get a little bit twitchy So what I want to see I think is a break above This daily moving average here This 50 day moving average Because it's capped it quite nicely Since June And we haven't closed above it We've gone for a poke through it But we haven't really closed above it And we are trending lower But at the moment There's no evidence that we've hit a little There's no evidence that We're going to revisit The lows that we saw earlier In August That's pretty good support coming in In my opinion also I think the washer we had Back in August It's not a perfect one But it's close to a double bottom It's probably more of a bear trap Or we had a small breach Of the lows from earlier this year But they didn't hold And then we've seen support come back in And that's telling me That odds are that We're probably seeing some interest And by the way That was something else I wanted to note I'm glad you brought that up Thanks With this breakout We had earlier this week Has busted a descending triangle pattern As well So that was a big bearish triangle Forming that's been That's now been called off It's been decisively broken And WTI is holding nicely Above that trend line Now it's still sitting in the channel And it still needs to break out Of that to signal an uplake But that causing That descending triangle to fail It's also a nice bullish signal There for it Okay I'm being asked If the Fed don't hike tonight And we get a dollar bearish risk on move Would you look to fade the move? Shall I throw that to you? Would you want to take that? And then I'll respond Colin Sure So the dollar of late I think the dollar pops out For what it's worth Yeah, me too As I mentioned earlier In the call I think that the U.S. dollar Has priced in A rate hike since March And it's just basically Been holding And it's actually quietly Been drifting downward And so I think that Either way I think we're probably looking For some weakening U.S. dollar Over the next little while Because it'll either come from The fact that they're delaying The launch of interest rate Left off Or that they'll do The one and done thing Whereas the market might be pricing Is probably still pricing In long-term multiple moves I mean I think the last time The Fed started raising Interest rates They went a quarter point In something like 11 or 12 straight meetings And we're not looking At that this time We're looking at one or done Or two and done And that's been The most central bank This decade Nobody's going on A major campaign I think the biggest was The Airbnb did four And they've already Given three of them back So we're not looking At the kind of campaigns That we've seen In the past Where the Fed would Start raising rates And then just keep on going Or like they did With tapering This time around And maybe two Or the fellow Probably would do one And then maybe in March They'll do another one And one a quarter Or something like that Through next year maybe Is what I'm kind of thinking So because of that If you've got big expectations For a campaign built into The US dollar And you don't get it Then you could see weakening So in my opinion I think from here The US dollar could weaken Either way Yeah I do too I think irrespective Of what the Fed does That I think the dollar Has topped out In the short term And certainly this chart Oh Euro dollar Would appear to reflect that Everyone's talking Euro dollar Down to sort of 105 The 108 But every time it's tried To get below 110 Or around 108 It's found steady Streams of buyers If we take this as a Four hour chart Let's look at the One day chart Or the daily chart And you can see That the lows Are getting higher With each move up Okay we haven't actually As yet really taken out The 115 level And that could take some time But certainly the moving Averages now Which were very negative I mean look at these here You know from the moves That we saw from 140 In May last year Or just below 140 I think the top The top was 139.92 And my stop loss Was at 139.85 Thanks for that Because I was short So I was not happy bunny But there we go Still can't let it go We've got a good degree Of support through 112.15 Here from these two peaks Here and then we've got A low there from yesterday And we've got a trend line Support coming in From the lows in August Coming in through here So irrespective of What the Fed does I think if the Fed is Overly hawkish Yeah we will get A dollar up move And we'll probably get A test of this trend line here But I'm certainly not expecting Fireworks I think the ECB is probably In as much as it can go At the moment So we've still got another year Of ECB quantitative easing They can jaw bone as much As they like about doing more But they can't really do more For another year You haven't even hit Their targets yet Exactly so You know I think that's Getting a little bit premature We are starting to get A little bit overbought On the four hourly Which does appear to suggest That maybe we've got A little bit of resistance Around 114 And that can be borne out By just sticking in A little line here So certainly a bit Of a barrier there But overall I would expect Euro dollars To probably start trading 111.16 Over the course Of the next three months And it's a similar Sort of story in cable In fact if any Currency is going to Outperform It's probably going to be The pound against the Dollar Because of the fact that UK data is becoming That much more It's starting to point In the right direction I am a little bit concerned About becoming A little bit overbought But again this is something That I covered a few weeks ago At the beginning of the month A bullish engulfing day On the cable Prompted a move from 151.70 To 155.20 155.30 Now there is a risk I think at the moment That we could be near A short term top In that particular move And I'll draw the lines On this to basically Indicate why So we've got the 61.8 Fibonacci Retracement Over at 155.70 So we're going to get A bit of resistance Of 155.70 And we could get a pullback To around about 153.30 But 153.30 is the key level On the downside 155.70 on the top side If we get A little bit of sterling Weakness and Dollar Strength This is probably where It'll come back down to But overall I expect The pound to strengthen Against the Dollar Simply on the basis of the fact That I think both central banks Are on a pretty convergent Rate policy strategy At the moment And the fact of the matter Is UK rates are still higher Than US rates Certainly in the context Of the base rate In any case So if you look at The US 10 year And the UK 10 year Actually the US 10 year I think is trading Above the UK one I'm not sure I'd have to look at that But overall The pound Looks in pretty good shape Can I ask you something On that Michael? First of all interestingly Enough on this chart That Golden Crosser Is looking pretty nice And on top of that I guess my next question is With what we've seen On the 4 hour chart So that's looking pretty nice There and the So again my question For you is That while we're on it We've been talking a lot About that we've been Looking and when we look At the US We've also been looking At the UK And we've been going under The I think both of us Have been going under The assumption that The Bank of England would Wait for the Fed to give it Cover to raise interest Rates as well And I think most people Have been figuring That the UK would hike Around June of next year Are we looking at Moving up With that moving up To say February or March I'm looking at March Based on that average Earnings date yesterday The date that came in At 2.9% I'm expecting 2.4% I think we could come If we get another number Like we got yesterday Then I think the pressure For the Bank of England to act Sooner rather than later Would increase So I think the Christmas season Will be very very important Black Friday How retail sales do In that context Because that's where most Of the retailers Make the most of their money For the year And UK retailers And US retailers Have had a pretty bad time Of it And they've had a pretty bad time Of it In terms of their profit margins This year So I think the Christmas shopping Season will be more important Than ever If they do well Their retail sales hold up Average earnings continue To increase Then I think the prospect Of a rate rise I think is fairly high And probably we're looking For February or March Right And I think I'll note with When Kearney raised rates In Canada He did two and done So he went from 0.5 To 1.0 And then basically Steed there Till the end Till he moved to England And it was only this year After the oil price crashed At the Bank of Canada Went back down to 0.5 So I think it would be reasonable To think he'd probably do two And one or two And then go and hold again As well Okay Now there's one other thing That I want to look at In terms of the dollar trade And it's the Aussie dollar Because that's looking quite Interesting And then can we do Dollar CAD Because I want to do Yeah, absolutely That as well Okay, so Aussie dollar We've just broken this down Trend from the May highs But we haven't actually broken Above these lows that we saw In July Around about 7240 But does that look like A potential head and shoulders Or inverse head and shoulders We've certainly got what I Would call A little bit of a star pattern Candlestick A morning star We've had a succession Of fairly positive Trading days here We've run into a little bit Of resistance just below 7240 What would cause a move Higher in the Aussie Given the fact that we've broken This downtrend line Obviously a stronger Aussie In a weaker US dollar So would that suggest That maybe we get a rebounding Commodity prices I know copper's sort of Rebounded a little bit today But I think that's largely On the back of That earthquake in Chile Which obviously has hit The copper mines in that Particular country So there's potentially A little bit of a production Production issue there Which has pushed Copper prices up A little bit today But not massively So certainly not by Judging by that particular Certainly up ever so slightly That'd be a short-term impact Anyway I think Yeah But it's interesting Because the Aussie has Aussie looks like it's Ready to break out The Kiwi's leveled off And dollar cattle Looks like it's Ready to roll over Okay so let's look At dollar CAD See whether or not We can get confirmation Of that particular Thought So this is a one hour chart Let's go and blow this out A little bit And again Daily Okay so yeah This is my channel That I drew in The last time we did One of these webinars Colin and we We do look as if We're about to roll over I think the key level Is this This area of Lows through here Yes Do you not think Yes absolutely And if we look At the stochastics We've still got this Negative divergence Forming in this Quietly working its Way down so Yeah this one to me Is what I call More of a rounded top Or a rolling top It's not a You know we haven't Had to spike up But over the last month Or so it's been Showing signs that It wants to roll over It just hasn't broken And you know What happens with these Things when it does break It'll probably have A fairly significant move Whichever direction It breaks out of this Thing Yeah it'll probably Be quite impulsive Certainly I think If we draw a line Through the highs Here we can see it Probably an awful lot Better Let's see if I can Finesse that line ever so Slightly In terms of Where the lows are So that's going to do that I think we've broken it Yeah I think We broke it yesterday So it's very very much Looks like it's Just a bit It's teetering I feel more confident about If we broke 131 Yeah me too But then again You know that's Still quite a big That's still quite A bigger Big old move I mean I suppose What we could do Is take that Take that low there But the dollar-cad move up Was in date Was basically Supported by two things One was the big rally In the U.S. dollar And the crash In the oil price And so to me I mean if we're seeing A big We were talking about Is the oil price You know Is the worst of the Oil price behind us Well you know Maybe it is If we're seeing Dollar-cad Topping out that the way It is Or that the big Dollar drive Is topping out When we look at The way this is going One of the two Because that was The most aggressive One way or the other Neither of the daily Candles They're not really Telling me anything I mean you've got A little bit of You've got quite a few Bearish candles in there But it's so choppy That it's hard to sort of Determine any Significant direction From one day to the next But certainly I think There is some evidence On the basis Of the four hour charts That we are looking A little bit Toppy but The oscillator is Looking a little bit Oversold Which suggests we might Have a potential For one life Yeah that sounds reasonable Okay Ladies and gents Do you have any questions That you'd like to ask Colin on myself About particular markets That you're interested in At the moment We're looking at Some of the key levels On US indices And for me I'm looking at The 2000 level On the S&P 500 Certainly on this Particular daily chart Here It's actually More prevalent Could you draw Your line under that Because what's something That I've found intriguing Michael's absolutely right About the 2000 On the S&P 500 Because it keeps getting To that and following back But if we look at All these higher or low And the other US Indices are similar We're getting some really Nice ascending triangle Basis forming here Over the last Over the last three weeks And I had been Thinking that When looking in the past Of 2011 And 1998 That we had a summer Sell-off and then A retest in late September Early October And as I'm watching These ascending triangle Basis form though I'm getting less confident In my thinking that There could be a retest It looks like we're Instead getting Just some really nice Base building here But we do want to Recognize though That the weakest time Of the year for stock markets Runs till the middle Of October When earning season Kicks off So we've still got room For some chopping But that's a pretty Sweet technical base Forming there It does look like So remind me to Cover gold Of just being asked About that column Before we finish So I'll look at gold In a minute for you, sir Let's also look at Quickly the Dow Because the Dow Does appear to have Already broken out As we can see From this particular chart Here Trying to peek out of it Trying to peek out of it It's going to struggle Sort of struggling A little bit But certainly there is Some evidence that We've closed above it And it does have that And also the peak The lows It's amazing how similar An awful lot of these US markets look And it's pretty much But it is somewhat notable That it's quite different With respect to Say for example The Germany 30 Or the DAX We are still struggling To get anywhere near The lows Or sorry The levels That we saw At the beginning of August But again We've got this series Of lower highs Coming in With the peaks The peaks are Really conclusive So I'm a little bit torn With respect to this Is this a reversal pattern Down here Or are we just trading Sideways before another move Lower? It's really difficult to say One thing I would say With this particular chart Is this DAX chart From the 2011 lows Massive support from That trend line That I've drawn in From the 2011 lows And that's pretty much Where we bounced off Earlier this year So certainly worth Keeping it up For the next couple of Weeks We're going to So certainly worth Keeping it up Do we have another go At this level Or do we start To head back higher Towards the 50 And 200 days moving average Which have only just Posted a death cross On the crossovers And this is not just The DAX This has happened It's happened on All of the other European indices As well We can see it Also in the Euro stocks 50 Similar sort of thing As well Around about 3,300 Good area of resistance Draw a horizontal line Right through those Lows there Through those highs there So again That gives you an indication Of sentiment in European markets So for me I think if we're going To move back higher We need to move outside Of this box range Where we've got the lows Here and the highs here Okay, so Let's move to gold Gold is Another one That'll be really Interesting today Because the action And gold for the last Week or so Has been Quite intriguing to me We've seen This whole big downtrend We've seen in gold Was the mirror of course Of the big advance We had in the U.S. dollar So if we're talking Starting to think that Perhaps the U.S. dollar Advance is done Then that could start To look a little bit more Encouraging for gold Because even though In the short term We do get the inflows In and out of gold During times of crisis Like we had back in August When Chinese markets Were going crazy And we had the spike In gold Generally speaking What I'm finding interesting Here is this higher or low So we've had a correction But we are getting A higher or low in 1100 It's starting to hold So just as Michael and I Have been suggesting That the U.S. dollar Is looking toppy Gold here is starting To look a little more Interesting now That's a symmetrical Triangle so we still Have to call that A consolidation And a downtrend But if we get Any signs of Improvement and Any moves up Out of that triangle Would start to signal Potential for some Pullback in U.S. dollars Strength in gold And I also think It's interesting the way It's rolled up out of Oversold on the stochastic So gold is looking A little bit better here Than it had a month Or six weeks ago And that's the thing I think everyone was Writing gold off And everyone's Writing crude oil off And when people start To do that I've been in this Business 20 odd years When people start To do that And you get a narrative Pointing that certain way And I start to shy away From it Because it starts to Become a little bit Of a crowded trade So that can be A sort of rather Difficult thing to do Because generally No one likes to be The one person Who says, Well actually no I don't agree with that But I don't have A problem with that It sets you apart And ultimately If you manage Your risk correctly It's in need And costs you An awful lot of money Or in any way Shape or form It's just about managing Your expectations And managing Your entry levels In and out of the trade So certainly in the context Of this particular chart Here As long as it stays above $1100 an ounce I would expect to see Gold prices head back Towards the top of this Trendline resistance Around about $1140 And that's a fairly Simple low risk type Of trading strategy That you could adopt Because you're mitigating Your risk to the downside But maximizing your risk To the topside And that's one of the keys For successful trading Making sure that when You take a position on The risk that you take Is small relative To the upside Anyway Okay so Anything else Apart from Gold ladies and gentlemen Okay Well if that's it Colin and I Would like to thank you For your attendance We hope that you found This webcast webinar Useful We do these every month Colin and I Usually on the third Or second or third Thursday of the month So please feel free To make this a regular Thing More than happy to take Questions From you And we will be posting The webinar on YouTube Within the next 24 hours So when the Fed does Raise rates After we've told you That they put them on hold You can all laugh at us So the time is That the announcement is 2 p.m. Eastern time That's 7 p.m. in London Is the announcement Of course as well as The member projections And the dot plot And all that And then the half an hour Later at 2.30 Eastern time 7.30 British summer time Is the press conference With Chair Yellen Okay so That's it ladies and gentlemen Thank you very much For your attendance today And we look forward to Hosting you again Very very soon From me Michael Houston And from Colin Thank you very much Cheers Colin Cheers Michael That was great Thanks