 OK, very good morning Wednesday the 4th of March. I hope everything is going well for you. I am going to do the normal routine. I will talk about the news that has come out overnight, some interpretation of what I think about the Fed and also Super Tuesday results, Sleepy Joe finally awakening to see what that has done for markets and what does it mean, is it important and what to look out for going forward. I will hand you over to Sam for a look across the charts from a technical perspective as well. Before I begin, if you are watching this and you do not subscribe to our YouTube channel then hit the subscribe button. Turn on the click the bell for notifications like with yesterday. If there is unexpected big news like an emergency rate cut of course that's the sort of thing which I'll jump on the mic and be sharing so make sure you subscribe to the channel. Back to business then, let's have a look at this is kind of the main headlines of this morning but before I get on to that let's just have a quick look and review of the markets across asset class and as you can see things a lot more kind of calm than where we were kind of last week. I say that the S&P 500 did finish down 2.8% last night and the Dow finished down 785 points despite an emergency 50 basis point rate cut from the Fed. So quite counter-intuitive and we'll talk about that in a moment but for this morning the European get-go things are I would say relatively neutral. If anything there's been a little bit of a shallow recovery moderate I could say in US index futures after some of the super Tuesday results have come out but still generally lower than where we were post the action from the Fed yesterday. Elsewhere in the currency markets the dollar's pretty flat and I think that's largely reflected in the major pairs. Scythe discrepancy in the major so euro dollar just above its pivot in the futures cable just below that point at the moment. Some important UK data of course coming later this morning in the form of services PMI. Elsewhere the US 10 years up about 15 ticks so after that initial volatility that we saw you did see a complete reversal of the initial move and let me just put a ellipse around it here we spiked obviously when the Fed made that move came all the way back but we have grinded back and gone into kind of a holding consolidation pattern for the moment but still holding on to again about 14 ticks in the 10 year so people still having very depressed expectations in regards to the future of where US yields will be given the fact that the kind of question marks now where did the Fed go from here and so on and then with gold quite a little bit choppy when Europe came in this morning a little bit of a downtick but still trading above its pivot which lines up quite nice then with that low print and that eventual push up higher that we had shortly after the Fed move which was yesterday on the R2 we kind of responded to around a similar level to that break higher that we had around the I guess it was around 16, 27, 28 level where it's responded to late yesterday Wall Street sessions so worth keeping an eye there on the pivot if we push through those that test of the early European low and gold All right, well let's get straight into some news and first things first, let's talk about Fed and a lot of the headlines kind of following a similar suit to what we were saying the immediate aftermath of the action my first interpretation definitely was one of kind of shock in a way a shock that I just found it really quite surprising that the Fed wanted to act so early I kind of thought, well they're kind of putting themselves into a bit of a corner here and I don't think the markets are going to like this type of pre-emptive action and obviously that did end up turning out to be the case by the close but one of the things here and a couple of things to look at Powell was asked because there was a short press conference after the decision itself what changed, you know what's changed between the last week if you remember there was a whole slew of Fed speakers about a week ago and none of them indicated that there was a need for an imminent cut fast forward a couple of days and now Powell said the broader spread of the virus including in the US puts a risk to the outlook for the economy and for me the problem that you have here is about well let's just have a look at the coronavirus update we've not looked at this live tracking board in a while and the US is currently at 127 cases now that number is going up and it's likely to go up I would say probably into the thousands over the coming weeks and so the fact that they've fired their bullet and it's a heavy handed blow 50 basis points doubles up on the 25 increment cuts that we saw in 2019 if you think about where interest rates are now the lower bound is at 100 basis points so now that you've done 50 you can't do anything less than 50 you know this is the difficulty that central bankers have is managing market expectations now if you did 25 as a kind of to add and you might think well that's a cumulative 75 markets are going to be disappointed with that so in my mind now they've got one more bullet left in the chamber of the monetary gun for interest rates which is another 50 75 perhaps cut and then they've got to turn to QE so it's this notion of have they gone too soon they've got limited ammo at the moment anyway and so when this number does which is almost inevitable in the US to confirm cases and death rate go up you know then what is the question I think that's why the markets perceived that in quite a negative way yesterday it's about the future and how are they going to manage there after the current situation this was the other thing then the Fed break up strains central bank peers with less room to follow now you'll remember there was a G7 conference call major countries finance ministers and heads of central banks were meeting yesterday and the other very telling point for me was yesterday the Fed have gone it alone now that does make sense on one side which is this this is a look at the Fed the Bank of Canada the ECB the BOJ and the Bank of England the where interest rates have been since the sharp drop that we saw in reaction to the global financial crisis and the move in rates at the end of 2008 however the problem you have is really the blue and the light blue line particularly here and also the grey line this being the zero or negative territory of the ECB and BOJ rates and then also the Bank of England being only at 0.75% now unlike the Fed these other central banks have nowhere to go with rates essentially the Bank of England you could argue could albeit there are just two kind of rotations off being back at that historical low level if they were to go at a normal 25 increment then it leads down the route of QE and so on so this is where this idea comes from the strains now and what I thought was so telling yesterday is that they would have had this call and these discussions the Fed would have at that point of said we're going to go this afternoon and these other central banks would have been resistant and rightly so because for them you know there's even fewer options on the table but this is what's very different from the global coordinated cut we had back in March of 2011 what we had back in 2008 when all of these banks went in a synchronized fashion and I think that takes some of the fire power out of what the Fed did yesterday and so people that have been around in the market long enough were disappointed effectively from what we've seen so yeah it's going to be interesting obviously the RBA of cut the Fed of cut the ECB is priced per market expectations for a cut of 10 basis points next week and so these other central banks might well follow in step but I think for the immediate payoff in yesterday's intraday activity it was the fact that they didn't go in a coordinated time fashion that perhaps disappointed some back on the coronavirus for a second I think it's been quite interesting from a behavioral point of view and I heard Sam talking about this yesterday you know last week was so all about the virus, tracking the virus numbers specifically this week it's all about the central banks it's kind of like we've gone into this next phase from a trading point of view it's about okay we've reassessed that the future is going to be heavily impacted by the increase of the virus globally outside of China now it's about the next question what are central banks going to do about it and I absolutely agree with that idea and that's why probably there's a lesser focus on graphics like this that you've seen in this kind of the broader news sphere this week than last in terms of Italy, things obviously still they're the third largest country with cases just over two and a half thousand at this point in time and you would expect that still that number to go up okay moving on let's talk about Super Tuesday I'm going to talk about the results first and I'll talk about what I think it means for markets Joe Biden, surprise comeback in the race for the democratic nomination as you can see here these are all the different major states Super Tuesday because it's a whole collection then are some of the super states like California, Texas but rather than just going caucus at a time Iowa, New Hampshire this is when we get a whole load of results in one specific evening and as you can see here the results are in and it's a resounding victory really for Joe Biden apart from the super state California where Sanders has edged it Sanders also picking up a few other areas in Utah, Colorado and Vermont otherwise Biden storming it really and people are making a lot of big deal out of this because of the fact that Joe Biden was basically written off only a couple of weeks ago but as I was talking about before is kind of stepping down of some of his most credible threats like Klobyshire or Boudge have helped then put support into this more I guess, recognised and centre democratic candidate so Bernie Sanders obviously did win California so it's not all done and dusted just yet Michael Bloomberg after spending what the best part of a billion dollars all for nothing seemingly he won one contest in America's Smo and that was it Elizabeth Warren who you can see the third candidate on this list seen as one of the real contenders finished third place in her own home state in Massachusetts she failed to be victorious in any of the contests essentially so you can pretty much write her off from now forward overall Bloomberg kind of hyping this up a little bit they're talking about the idea that you know somehow stock futures have spiked overnight on the back of this I would say they're just trying to make a bit of a mountain out of a molehill I really don't think this is important quite frankly because whether it's Sanders or Biden they're going to lose to Trump and that's not me being some kind of Trump fanatic that's just the way it's going to go at the moment at this matter of time so I guess what you're seeing overnight if there is any positive relief recovery in equities is the fact that you're not getting a socialist candidate which obviously tends to be quite negative for the stock market much in a similar vein to Labour under Jeremy Corbyn in a UK-type sense similar-ish to then how financial instruments would react to Bernie Sanders if he was to be victorious so a little bit of relief I guess that he's now the leadership in that contest has taken quite a distinct sea change alright enough of that let's move on for oil prices I thought this was quite an interesting headline Goldman Sachs basically has come out and they're the first major bank to anticipate that global demand basically for oil will contract in 2020 for the fourth time in nearly 40 years this is what that looks like global oil demand has only contracted in the last three years since 1985 you can see here going back to what would have been this era in the early 90s and then around the financial crisis in itself as you would imagine a massive hit to consumption through the depths of the global financial crisis at the time as the world economy shrunk considerably into a global recession the spread of coronavirus from China across the world is threatening economic growth as their reasoning and fuel demand in particular as companies ban travel and supply chains are disrupted are the reasons why they're making that call at the moment so quite an unprecedented one I've not seen going back for really the last 10, 11 years from that point of view sticking with China and oil you did have the occasion China's general services business activity index overnight I'm not going to spend too much time on this because we had the manufacturing and service PMI data the kind of state run numbers over the weekend and they're pretty horrific so this number in step with that so it's not really new information but I'll make you aware of it record low territory as well for that private reading and then for oil we did have the API crude oil inventories last night these are the numbers a headline build of 1.69 million slightly shy of estimates of 3 million gasoline, quite a deep draw just shy of 4 million more than double consensus but quite frankly I think these numbers are irrelevant they're irrelevant for two reasons one, there's a much bigger narrative driving oil at the moment which is about this idea of consumption as I just mentioned what Goldman's was saying on that demand side fuel demand, companies banning travel supply chain disruptions the expansion and growth globally of the coronavirus that's what's driving oil prices right now so this number I don't really think is particularly important and then you've got a layer in the context that you've got a looming OPEC meeting commencing tomorrow of which anticipation is that they're going to further deepen supply cuts so really this is just a bit of noise and I anticipate that that will be the case when that data points come out later on today all right, talking of the calendar though there is a busy docket today of lots of different things that are coming out so let me just run you through a couple of things to look out for you've got the various services PMIs coming out of the eurozone this morning you've had the Spanish service PMI already this morning coming in slightly weaker but still expansionary you've got the other figures coming up leading us into 9 o'clock the UK service PMI though is particularly interesting even though it's a final reading it does typically have an influence over the British pound and let me just jump to here this is the service PMI last 12 readings that we've had so despite the fall that we had last month from Jan to Feb actually the reading was the second highest we've had since September of 2018 so we've definitely had what I'm kind of classifying as a Boris bump on the Tory majority looking to break the Brexit impasse that we had on the Theresa May obviously to move into this transition phase but as we've kind of talked about with UK economic data the idea here is that we're expecting this to materially weaken going forward as deal making between Britain and Europe will be slow in the making and therefore the kind of pressure will ratchet up once again on the UK economy under that political uncertainty in terms of expectations for that UK number it is expected to remain relatively steady at the same number in fact as the previous print in February at 53.3 we've got a range of 52.8 to 55.8 going further forward then into the afternoon we start to see all the different employment data out of the states we've got the non-farm payrolls number on Friday of course and that means we get ADP national employment now you'll remember ADP from last time that was a spectacular number think about where we were about a week and a half ago or two weeks ago remember economic data out of the US was amazing and if you take ADP you remember that came in at 291,000 street expectations at the time were for 156 it was almost double consensus knocking nearly 300,000 the best private payroll number since May of 2015 so that was when markets were ultra bullish you remember the dollar Alex and I were talking about a dick seed closing in on 100 fast forward to now the Fed have just cut 50 basis points so you know it's amazing how quickly markets have changed and definitely last week was a real key turning point of course with a big correction in markets more broadly so with ADP one thing I'm going to say about ADP and I'm going to say now about non-farm payrolls on Friday quite frankly I think it's not that important yes it's going to create some short term intraday volatility I do not think it's important think about what's driving these central banks decision making on their various governing councils or committees it's all about quantifying the impact of the coronavirus and so yes there is a knock on domino effect that that might have then on a slowdown of the US economy and therefore the employment situation but the backward looking employment data I think is not really that relevant to be quite frank given that we printed nearly 300,000 last time expectations are we kind of come back to reality 191, we've got a range of 140 to 250 if we come either side of that I don't really think it's a big deal to be quite frank so keep an eye out for it I wouldn't suggest having an open position over it because it probably will create some short term movement and the potential for a short term spike in prices but I wouldn't be looking for it to be a defining factor really to probably dictate proceedings for the rest of the session even though traditionally it's quite an important number you've then got ISM non manufacturing a quick look at what that looks like here we had the strongest expansion in the service sector since August due to an improvement in production but just think about it if you're talking about purchasing managers now going forward not just this reading but beyond the coronavirus is likely going to impact this type of reading going forward the question of course severe is that impact will determine then whether or not we eventually move back in towards that 50 key level and the depths of where we were in Q4 of 2019 so quite a busy calendar in the afternoon and then you've also got the Bank of Canada now go back to that graphic that I showed you here the BOC is the orange line you've actually looked the Bank of Canada rates are above that of the US so the Bank of Canada is a little bit different from the BOE, the BOJ and the ECB because they do have a little bit of room for the manoeuvre so it's going to be interesting to see whether or not they come through and deliver a similar in sync move to the Fed or not rates currently in Canada at 1.75% so the Looney always very volatile and sensitive in the FX market likely to be even more so today so keep an eye out as well for the statement that they issue future intentions and then you've got the oil infantries we've already talked about that again I don't think that's really there's so much bigger broader macro themes in play at the moment it's something to be aware of but again it could be a trigger point for a technically sensitive area but other than that I wouldn't really pay too much attention for longer lasting direction Speaker wise, Bank of England is broadband spinking at the London Business School later this evening 6 o'clock Feds Bullard now a non-voter speaking after Wall Street closed this evening alright that is it from me so let's get Sam on see what he's got to say about the technicals and the setups for today and I wish you a good day ahead thanks very much guys Hi guys good morning I think I better start by saying props when it's due to Anthony for that call last night and to come on YouTube and say that live I think deserves a round of applause and just having a look over stocks now because it begs the question really where do we go from here I tried to get another piece of advice from Ant this morning so am I selling this by the bounce he's just not really buying the bloombow story of it but what a key level actually where we were just trading 30, 46, 50 it's all about really I guess developing these lines and the sound and you know on days or weeks like this where you've had the five days before where it's just extreme volatility and Monday's range in the Dow Jones was high to low I think it was like 1400 points and then yesterday in the S&P just look here that high to low 31, 37 to 29, 71 it's insane at the moment it's incredible I would say the most incredible thing this week is that it's only Wednesday today and it's you do need patience I saw some good tweets last night where obviously people got caught out by the rate cut you've got a lot of people that haven't traded 2008, 2011 and it's hard to I guess deal with this volatility and there's nothing wrong with that there's nothing wrong with sizing down in these markets because the moves are so much bigger this is have a a switch back to what was going on even January you can see the size of these moves on these days are so much smaller to where we are what we're trading now there's nothing wrong with sizing down or if you don't want to trade these conditions it doesn't suit you nothing wrong with that at all but in terms of looking at levels today I think well if we go back to yesterday how these highs and lows were respected when they broke through you got those fast moves there's no way you could have got in on the push above that unless you had buy stops to get in on there and even when we broke through we came back it was very choppy on that way down as well the level we're trading now 30, 45 or 10 points above is pretty key I would say if we can get above there then the market might just continue this early morning push that we had over night to the downside I'm just going to put this 15 minute you can see we have just been drifting and we really got a kick on once we broke through 30, 10 so that for me is another level and it's just sort of developing now these little ranges obviously quite a key zone as well where we couldn't break through at all 29, 86 for the S&P so those would be the nearest levels one to the upside two to the downside that I'd be focusing on can we get a bit of a trend line in play from those lows not quite yet I would say you can see how choppy that was but I would get one on around here just to see how we potentially come into play along with 30, 10 and this trend I overall I would say favour the downside but I would rather you know see something like a trend line develop and a break of support momentum coming in you can see plenty of times last week we actually did drift higher in the morning sessions and it wasn't until the afternoon where we actually started to push to the downside I think there's going to be plenty more headlines that come out and as I said on Monday it's going to be a headline driven market and you know trust these levels for sure but just be aware that before every trade except when you're wrong and except where if the conditions don't suit your edge don't trade it I'm going to look over gold as well we really did push on there I guess on moves like this it's worth just bringing in the fibs on these pushes higher the key level which we were talking about this time yesterday we were saying around that sort of 16, 20, 16 27 those lows that we had before that break through on Friday that's acted as a bit of support in late trade yesterday that also coincides with the pivot for gold there so keep a watch on that we didn't quite make the top end of that range from last week or Tuesday to Thursday last week 16, 60 so keep a close eye on that interesting to see which one comes first as well levels if the pivot was to break through 16, 20 and then as well horizontally looking at 16, 12 but the pivot for me will be the key point just recently we have broken a bit of support and you can see it's nice that gold is reacting quite technically here was a area where the buyers are taking over comes back as we come in and early trade perhaps when the headlines are going to be less driving price when the technicals are going to be respected a bit more oil spiked higher initially then came back lower this market is getting quite choppy as well and early trade this morning pushed higher however we are coming down to that 47 bucks we just draw up that 49 we didn't quite reach there yesterday for me medium term opportunity above 49 I do quite like the look of it and especially that 50, 50 we can get above there for some more medium term longs about the way equities responded yesterday to the fake rate cut and this makes me a bit more nervous about this market going forward again same with equities can we get any trends on those lows you can see a potential one coming up here for oil depending if I get that drawn properly you can see there it's actually not too bad you know a potential break of that can see further downside as well but just above yesterday's highs 49 dollars and the low that we had from the 26 morning for me is a really key resistance level with this trend was to go I'd say the bears would want to defend this zone here really really well or it could again get ugly and that sort of looking here 46 65 down to 38 so you know see these zones are a lot bigger than what they were just a few weeks ago so for oil those would be the key points that I sort of look at for a bit of a guide going forward and same with equities it's you know don't necessarily have to make a decision now but there are some key levels certainly coming up euro yesterday pushed higher than the decent move to the upside and if we just remove the pivots just to make it a bit clearer just to see how high we are now not far away well from testing that high again but we also hit this 16th of Jan high but keeping a watch if we were to get anywhere near that 113 the 31st of December high that we had as a very strong resistance level for me I was you know talking to the new traders that we had or have got in this week and I was saying before the rate cut I was saying for let me just mark this up for the euro if we can get back below this area back below 11280 on the daily close and I'm going to get a look for a short and then it's about an hour after we pushed aggressively through that so that's you know still an opportunity I do like to look of if we can close the day below there I think we can drift back lower looking down to sort of 110 and 109 from now I think that would be a good opportunity but for now that's going to be a level in an area where the bulls are going to want to defend and for me it's a good line in the sand that will be keeping an eye on each day going forward you can see the euro just finding a bit of support back above that pivot and has pushed on since then you've got a bit of a break of a trend in early trade as well that you can see here we've got a nice push through so keep a watch on that if we were to get that lower big area support on those lows that we had this morning so it's nice to see in early trade across the board the technical levels reacting quite well I think for this move here you can expect to see quite a bit of resistance around 11.93 to 12 keeping a watch on that was the high that we had on Monday and a nice little breakdown area from yesterday as well the pound let's bring that daily chart in is that level that we talked about on Monday still going to hold I was saying I was confident yesterday you would have been even more confident when the Fed cut rates but we have just drifted lower and now putting this on a 60 I know it's a big range but if I was super confident I would be even more confident if we can get back above that high that we had on Monday for now let's bring in that trend line it's too good and I think if we can get below there and the S1 I think we get the low that we had on the evening of the 28 pretty quickly so that's a very important point I would say for the cable S1 trend line or potential trend line lows from yesterday as well another intraday level to keep aware of just the pivot a good nice area of support all morning before that break through but S1 not too far away just keeping a watch on balls I think we get slightly more happy above the R1 which of course now seems quite far away T-notes the market that just doesn't want to come down at the moment one down day since what's that, the 19th of February incredible move here in this product it's got the dovishness of the rate cut it's got the safe haven aspect and it's just continuing to go from strength to strength it's a big if because of course this market again is on it's relatively on it's highest for the day now if we could get maybe down to Monday's high along with the pivot area and obviously wait to see how price holds around that level it could be a good point to potentially get in and to be honest for these markets I'd only really be looking to get long at the moment however obviously a break down from there is the better opportunity to get long lower down and I don't think there's anything wrong with having a bias on these products and just waiting for that to come in once you get that confirmation of course it may never happen but loss of opportunity better than loss of capital any questions as usual guys please do let us know I think there's some interesting levels coming up most notably 3045 for the S&P which is the same as 8733 for the NASDAQ and 26313 for the Dow a break above there might get a bit of a pop through but a strong level nonetheless I hope you'll have a good trading date and I'll catch you all in the chat throughout