 OK, welcome everybody to the weekly charting analysis for myself, Jasper Lawler, starting at the same time but different time zone, we're in Greenwich Mean Time now, 12.15, no longer British summer time, got the risk warning on the screen here, certainly plenty of events happening this week economically, namely central banks, which are obviously the driving force in markets these days, and then next week we've got the US presidential election, so a couple of interesting weeks lined up, if you haven't done so already, I certainly recommend having a look at our US elections page on the website, it's right there when you first go on to CMC Markets, the UK edition at least, last time I checked 73% of CMC clients think Clinton's in for the win, that was before this latest email saga that rolled US markets on Friday, but I don't imagine it's changed too much since then, so here we go, and there is said move in the Dow Jones, you can see there was quite a sharp reaction on Friday afternoon, you know it's the cut off here on Friday, you can see that the Dow Jones went from being up here, well let me pull up the charts, here's a daily chart, but if we look at the one hourly, you can see there she blows, took out loads of the day, anyone with their stops down there, unfortunately they were blown out, used as a buying opportunity to take the market right back up again, and futures for the most part pretty strongly back higher, pretty much taken back all those losses, at the end of the day no one's going to know the result of these, this latest probe for weeks, if not months, so there's nothing, no real evidence there to derail Hillary Clinton, it would just purely be the fact that this email scandal is kind of unresolved and issues over her trustworthiness have helped Trump gain back a bit in the polls, but you know all that politics aside I think you can easily determine that this reaction in the market here tells us that should there be a Trump presidency the reaction in US stocks would almost definitely be negative, and again if you did want a bit more of a read up on the possibilities, there's a number of articles going up being updated on the US elections page from the website, I'll stick with the US 30 chart since we're on it, obviously we do have the Fed this week, and the fact that the Fed are poised to raise rates is certainly going some way to explain why the markets are struggling to break higher into new record highs, and so obviously on the last day of the month here for October and the US 30 as we trade it is set for its third monthly decline, if I zoom in a bit here, sorry fourth, and yeah you can see that they've not been in terms of the body of the candlestick, we had a bit of a bit of a shaky one in in August, but closed right back up of the lows, similar situation with a down month again in September, but we closed well off the lows and here it's looking even less certain, and you know when you go into the shorter time frames you see that very tight range that we've been in and this is it symbolized in the monthly chart pretty much just no you know no price action there, almost no body to the candle on the monthly candlestick, and you can see it always good to kind of zoom out to the monthly time frame, you know this is kind of you know we dropped through that previous record but then we dropped down to these old highs and that's what's holding us up at the moment so you know still the market I would say generally in sort of bullish condition but obviously pulling back from those highs and I think that's understandable you know the you know the Donald getting in would be a bit of a shake-up and it would certainly create some uncertainty and it would be a reason for uncertain markets to unravel, that said I think there's been some signs of confidence to buy up close to these lows if you look at these these long wicks on these candlesticks on the US 30 just circled a few examples here seems to be a bit more evidence of being bought up from the downside than there does evidence you know here's the one obvious one from the top side but less wicks on these upper candlesticks which is just one indication to look at to suggest that maybe we're in for a break higher from this range eventually and we've got this down sloping trend line which is pretty well defied now so certainly can expect some false breaks above it but I think once we get a conclusive break above it you know that will be when we probably switch gears towards maybe looking to buy on dips to take us back to the top of the range again back up to the record highs but obviously we're not there yet that's just something we're looking out for but obviously should we get a break through the bottom of this range we've got this long-term support but down there through that 18,000 mark you know a bit below it where we've had these recent lows probably opens up a fairly sharp decline because that would you know this has been our sort of tightening market conditions so the markets are like a coiled spring right now compressed compressed compressed eventually we're going to get the break out now these would indicate a break to the top side but obviously you know the the US election the words from the Fed this week you know going to play a large part in which direction that actually ends up being if it is to the downside I don't think there would be too much trouble to get down to this 61.8% retracement you know if you judge on the kind of the the maximum width of this this price range which if you drew the line from you know there is you know I tend to be a bit more conservative in terms of projecting patterns particularly in the stock market which has a generally bullish bias you know you could take that width of the pattern there and project that down you know I think that would easily carry us down to the 78.6 or you can be a bit more conservative maybe just use this latest width maybe from here and that would probably carry us into somewhere in the middle now obviously it is it's you know it's always significant when there's the Fed meeting and I think that will probably keep a lid on on movements in US stocks and probably the dollar for most of this week up until Wednesday when that decision takes place but that said you know it's the US election next week there's all I mean the market's pricing about a 17% chance of a hike I would suggest that that really should be zero because there's no way the Fed's going to interfere interfere in a the political process we just saw the the kind of violent political reaction to the the FBI chief for you know daring to actually you know say that there are some new investigations being opened being called political being told to resign so you know why would the why would the Fed risk that when they could just wait another month now if I switch gears to the the UK obviously what the Bank of England this week as well and equally central the central bank here getting caught up in in politics as well you know at the end of the day the Bank of England forecast catastrophe if we if we exited the European Union that could still happen obviously but it hasn't yet and you know all the evidence points to their cutting interest rates being much too hasty probably wasn't deserved at all some some modest signs that inflation is picking up probably if anything they should be going in the other direction you know that's that's a that's an opinion but it's quite a widely held opinion now so you know the central bank just because it's independent doesn't doesn't make it doesn't make it immune from criticism when a decision does seem to be quite clearly wrong so we're going to hear this week whether Mark Kinney is staying it looks like he is going to do the remainder of his term as governor of the Bank of England so he'll be at the helm for another three years if that's the case or almost three years and should carry us through well into the article 50 type negotiations so should there be a bit of an economic storm later on you know he'll still be at the helm what does all that mean for for the policy this week we're probably not going to see you know I think there had been some there had been some some rhetoric by Bank of England members to suggest that that we're on for a possible rate cut this month but but the economic data just doesn't justify it and given that they're already facing a fair bit of criticism for getting their economic forecast quite clearly wrong possibly taking the wrong monetary policy decision by cutting interest rates the first time you know are they really going to double down on that criticism and and and then go cut rates again so again it's you know these central banks are independent they're not supposed to be influenced by political forces but you know naturally it's something that they have to consider so again you know the Bank of England cutting interest rates has been a real tailwind for the FTSE so again we looked at the three months of the US stock market declining you know we're looking at our what are we on the fifth month in a row I believe I said yep in the report in terms of a positive finish for UK stocks and obviously that's been largely helped by the the drop in the pound which boosts the earnings of the multi nationals in the in the FTSE 100 you know if you if you sold at the resistance of the old high you know well done because you know we're looking like closing in the bottom half of the monthly candle you know the index taking finding some understandable resistance here around that 7 130 the record high and yes it's much the similar sort of reasons it's you know that we don't quite know where the Bank of England is going to go in policy you know they had hinted at much easier policy maybe they're not going to now given the the politics and the more resilient economy than they expected and the the US election you know it's a global phenomenon and you know certainly would you know if we if US stocks suddenly have a crisis of confidence you know you can expect the same thing to happen in the UK and I wrote about much the same thing again on the on the US election page in terms of the implication of the election on UK stocks now down into the shorter time frame you know there isn't too much change from from last time we spoke you know what I was first eyeing was the fact that we broke down through this low so we broke down through the low and then looking for a retracement level for us to go lower now that we have had that you know you did well if you were looking it's basically going off the 61 is that am I right in saying I'll take it off now the 61.8 if you're waiting for the 78.6 unfortunately you missed out so we took out the low wait for the retracement to the 61.8 gave us three different opportunities well one two three four opportunities to sell down to the lows again and we've got a little nibble below but largely we've kind of bounced back from there and so now arguably similar sort of process happening again where we're looking for some sort of pullback from this decline so we've already hit the 61.8 that's stored us again you know you've missed out on this initial decline which took us back down to the lows just just on Friday but if you know you want another opportunity then obviously keep an eye on how the market reacts at this 78.6 and again back at that that old high again that's with an eye to the markets heading lower but you know it's not necessarily the case it's overall you know I think you know if we chuck a couple of moving averages on here we'd probably say that we you know we've just pulled into a consolidation but overall maybe looking at a sort of a weekly chart you know we'd so we you know we'd confidently say I'm looking at this chart that it's it's still bullish so you know don't get too sidelined about the fact that we're kind of tracking lower a bit on this shorter time frame chart you know that overall the bias seems to be good but obviously we have to bear in mind the fact we've hit a massive resistance level so signs of us edging down here but again that that that previous high here holding us up quite well we haven't closed below it for the week yet and again just to sort of reiterate that you know just using this this rally up from these lows here we bounce quite nicely up this 61.8 if we are going to edge lower again after this little retracement or even if we get a bounce to the 78.6 which I had around here and roll over again you know possibly this 78.6 which is 6846 quite close to the 6850 round number and obviously got these swing lows down here should the market roll over a bit further but these you know in the context of that quite large upswing in the weekly charts could provide some sort of opportunity should we get lowered from there you know if this is as low as we get then you know obviously we you know if you get more opportunities down here if you're more confident that this is going to cause the end of the retracement you know look with another dip down to these lows but there's not quite enough evidence for that yet I would say you know look at this strong move higher wasn't really able to take out these old highs particularly so it looks like there hasn't been quite the the kind of strong candlestick that you'd want to see to the upside to tell us that this console downshift consolidations over now I spent a fair bit of time on these two indices just because they do have the central banks and obviously it kind of covers the the whole gambit in terms of the the US election but I'll try and speed things along a bit for the the Germany 30 here actually quite interesting in terms of RSI because I had pointed to this RSI trendline break before suggesting that could help us to the top side now the market continued up to the the resistance but pulled back here from the top of the range now it's actually bounced off this rising trend line on the price chart also off this fourth touch on this RSI price trend line as well so a couple of reasons to think that this market could push higher out of the 10800 mark and you know we're going to have a look in a minute but we've seen quite a sharp drop in the in the euro so if that's able to sustain itself then you know that's that's a tailwind for Germany 30 just like a drop in the pound is a tailwind for the UK 100 maybe in terms of currencies maybe I should go straight for well I did just mention the euro so let's have a look at that first but I will also have a look at dolly n because obviously we've got the boj this week as well this is a daily chart for the euro just a couple of moving averages on here just to highlight the fact that we were in this you know just in terms of differentiating the kind of trading environment we're in we're in a sideways range here I'll give me a bit of this kind of more like a triangle I suppose something along those lines triangle but we've broken down through the bottom of the triangle and these moving averages have been widening out as well so even though we've pushed it back above here you know the fact that this 20 days below the 50 gives us a a slight bearish bias to the euro but again bearing in mind the fact that we're heading down to this potential support down here near the the 10820 mark and then a confluence right in at 108 so we've had a bit of buying ahead of that but the fact these two out moving averages are lined up would suggest to me that we're probably getting to try and go into there and test it again this again on the rsi we've seen we're now finding some resistance at the old support in around sort of 45 mark on rsi on the daily chart so a couple of indications there that the the market is starting to find resistance of course 110 big big round number is here as well here so if you are if you were able to sell in at 110 you know well done because there was a confluence of reasons to think the market could head lower from here so again you know I guess the markets through the the dolly the euro dollars below 110 but obviously there's a lot of support now around 108 so I think it's probably that 108 109 then 108 where the the the DAX or the Germany 30 as we trade it would really start to pick up momentum again you know all else all else all other factors remaining the same you know that we euro is would be positive for the Germany 30 now we'll just jump to dolly yen because again we do have the Bank of Japan this week and the developments in the in the dolly yen are working out you know quite well at the moment so we had this fairly classic looking triangle pattern we've got the nice breakout we found the resistance at the old high we've dipped back from there you know I was talking about in last week's webinar that's you know either the market holds on to these lows or it goes for a much deeper retracement down to a 61.8 or 70 or 78.6% retracement down here obviously it was the former that happened and if we zoom down to this lower time frame you can see we've had a nice rising trend line here and if anyone was you know buying on the breakout and got worried by this candlestick you know just keep in mind the overall circumstance here that we basically this was the resistance we broke above it and we've come back down right towards that just about that resistance area and this rising trend line and obviously the moving averages here kind of lining up both on the short and the the longer term so the market has been bouncing and I wouldn't you know contingent on what does happen with the Fed which I think would probably be a much of a non-event and the Bank of Japan you know I think this dolly yen can keep trading higher because in the end they were expecting a rate hike from the Fed but we're expecting the Bank of Japan while not necessarily going to do much more easing you know they're still fully in there you know they're still doing QE you know so clearly a big divergence and policy there so I'll switch gears too well okay can't forget sterling sterling bit very much in a range I think you have to keep it on the kind of shorter timeframes here because it's you know it's hard to hard to really see what's happening on the daily chart but you can see these if you have just been you know not worrying too much that another flash crashes on the way we had a little mini episode last week but we just we ended up finding support pretty perfectly the 121 mark and then you know that carried us back up to what had been a nice kind of pivot area in around the 122 50 dropped that back from there down to the kind of the previous and you know up to here again so this is classic range bound trading market behaving I would say I would say quite quite functionally you know if you've been buying or selling any of these more clear support and resistance pivots you've been doing okay in this market and until we get a determined break below 121 and then really 120 being the big line in the sand you know we're range bounding in the pound in the light in the light of the flash crash it's hard to see there's going to be a huge amount of confidence to to buy the pound up you know you could argue it's the the final flurry of the with the bear market in the pound but I'm not necessarily sure that's that's the case it's become a bit of political currency at the moment the pound and you know all this hype around the future the Bank of England governor is is testimony to that so we'll jump over to crude now be the confidence coming out of the market that that this OPEC deal is going to hold together and so we basically put in quite a nice little double top here at the major resistance level so you know we had this line in the chart for a long time obviously we saw it get rejected once we came down to the lows sort of rejected a second time with this trend line in here so even if you weren't confident enough to go against the the likelihood of an OPEC cut up at the highs you know you had more opportunities on the breakdown here but again it's the circumstance where the the moving averages point to still generally bullish conditions and so some confidence coming out of the market that some sort of cut can happen and you know if they you know if they do completely abandon the the cuts at the meeting in November then we probably can't expect substantially lower prices but that's not my expectation I think something will pull together in the end and we've got some fairly substantial support around 4820 which is the 61.8 of this big move up here and it lines up nicely with this this previous peak from December September 23rd so and the rising trend line so kind of three three potential areas of support confluencing in this area may not we may not even get to that because we got 49 the 50 day moving average right on 49 so maybe that would be enough to to hold us up gold is you know gold had a big decline and actually did surprisingly well to hold off 1250 support what I did was and I haven't just done this now you know whoever attended the previous webinar can testify the fact I've had this fib on for a while I just drew a fib from where the market crashed which was you know this peak here just at the beginning of this candle where obviously the market rolled over big time and we've just come perfectly to the 61.8 percent fib of that decline and you know whoever lost confidence in the market here you know the smart money selling up here they're not selling down here you know once once this kind of moves happen you know they're waiting to get back to their prices again and while it's been impressive for the market to hold 1250 you know this has not really been a you know hugely you know you just it's a very kind of sluggish price action higher and it seems to me that even if even if the 61.8 isn't the kind of the actual top that we see maybe we get to 1290 maybe we even pip up to 1300 again it seems to me like whoever was selling the market down up here is just waiting for the opportunity to do so again to take us even lower so I think we're going to call it a day there covered all the markets didn't I saw I didn't go massively in depth into what's the the bank of Japan is likely to do I think they are going to be on hold because it was in the last meeting that they updated us in so far as they're not necessarily going to be doing exactly the same amount of QE each month they're going to be targeting the yield curve and that that that decision has actually been a large part of what's been affecting the bond market and driving bond yields higher across across the last couple of weeks so I don't expect them to double down on that maybe just update us on the progress and you know the market will be looking for any little hint to suggest that they're tapering QE heavy signs of tapering QE from the VOG by the way would you know that would be yen positive and dolly and negative but obviously that's that's only one side of the coin we've got the Fed hiking on the other side so you know while a Fed rate hike is imminent and potentially a steeper hiking of rates after that you know still you know this breakout and dolly and still looks fairly positive brilliant okay thank you very much for attending good luck with trading this week it's Jasper signing out