 Hello traders at CMC Markets. Welcome to another update from RRG Research for Monday the 15th of May. I'm recording this on Friday the 12th of May in the morning. My name is Trevor Neal and I'm presenting to you from London on behalf of RRG Research. Today we're going to start by looking at the global stock indices. There's a pattern in there, a little bit of a new development which we'll explore. We're going to the where the concentrated action is the two particular stocks which are leading things a bit. Then going to also this week look at the foreign exchange market and some developments in there to be aware of. We're starting with as usual the weekly relative rotation graph of world indices and this is benchmarked against the other indices and we're using as the actual benchmark the MSCI world index. So how are indices doing versus the the whole indices group? No real change here. We've got the NASDAQ on its own, furthest to the right and still hitting so with improving our S ratio. We've got in here the DAX, the stocks and the CAX, the European indices on the right so outperforming basically the other indices but easing back a bit having a bit of a struggle there. The UK index is in the weak side of it now on the left hand side of the vertical here and heading west so not looking so good after having had a good run it's turned around and the Russell 2000. Zooming away here so the most broad US index is separating itself from the rest of the US indices so that's not a good thing is it to have the breadth the wide to 2000 stock index performing so poorly and very narrowly based strength in the US market. We'll see it in the S&P, we'll see it's in the technology area of the S&P and it's really only still a couple of shares in the whole of the technology the Fang plus sector it's not a healthy situation but it's the reality and it's still going on so if you want to outperform the US stock market which is performing pretty well then you have to do it using only a couple of stocks and because the focus of the outperformance is only in those couple of stocks. Overall you've got good performance relatively from the European stocks but they are struggling a bit now. Again this is very interesting this is a weekly chart relative rotation graph of the major indices versus not the MSCI world this time but versus cash so things that on the right hand side of the vertical here are in a relative uptrend versus cash and things on the left are in the downtrend so here we've got the Nasdaq and sorry the Dow and Russell 2000 here we've got the Nikai over here and then we've got bunching together highly correlated with each other the European indices on the right with the UK 100 as well but much further to the right so much better and the UK is coming around quite rapidly towards the lagging quadrant but out here on its own in the top right is the Nasdaq so technology not the US Europe if anything but technology in particular is the theme. Here's the S&P 500 we identified the problem area the 4200 level for it it's struggling with it's been rebuffed by it it's still having a problem we've got a lower high on the RSI here the MACD is still positive overall and so that is telling us that the momentum long-term momentum is still good in this market however it's struggling at this moment if it breaks the 42 level then the next level is 4300 for it but at the moment it's struggling we want to see it hold the support at 4045 otherwise it's turning down but at the moment the dominant pattern is the higher lows the weekly MACD being positive struggle that we're seeing now and we saw that in the ROG chart but at the moment the longer-term trend is up and it should eventually resolve itself to the upside but alarming would be a move down through 4040. This is the Russell 2000 which is zooming off in the southwest of the direction and this is a completely different chart isn't it we've got lower highs in place here we have got some support down here at 16,640 but it's pressured I'm looking particularly at the MACD here look at this it's going down the MACD the momentum is on the downside here and the RSI is also weak so this is a chart which is showing us what we can see on the ROG chart it's the worst of the major indices and it doesn't look good at all now the US sector's relative rotation graph no change really here we've got except maybe the current the the existing situation has exacerbated we only have the communication sector and the technology sector over here on the right hand side they're pointing generally still in the right direction so gaining strength the best looking of the rest of them is the consumer discretion but it's very close to the middle here so moving with the the S&P itself and still the worst is the financials and the financials if you break down the industry sector the weakest part of the industry sector is the is what they they call regional banks but the regional banks are these things like SVB for example was called a regional bank although it was a sort of rather special bank but the smaller banks a lot of them are technology based and a story there those ones are still under a lot of pressure and it's really creeping through to some of the weaker looking big banks as well Bank of America for example the chart has turned quite ugly as well but we're concentrating on this area up here which is the technology sector so let's next look at the FANG Metta and NVIDIA right over on the right hand side here it's it's quite outstanding that you've got these two so separate and remaining separate the way they are so we're in the right area we've been since January was when we first picked up on NVIDIA it's really soared fantastically it's got to be said that the the others in the FANG group have started to improve as well Twitter particularly so there's new potential in these markets Twitter Google Amazon would be the three that I would look most closely if you were looking to add into this sector or taking profits or or got a position in it Tesla turning down not in the right direction at all so avoid that Alibaba also but there are opportunities here and I did see we were looking at the Russell 2000 zooming off from the southwest in the relative rotation graph that the market cap of Apple is now greater than the market cap of all the stocks in the Russell 2000 is that incredible amazing actually and many stock exchanges like including the London stock exchange Apple is bigger than the whole of the stock index incredible now before I move to NVIDIA and Metta let me just talk to you about the NICI this was one of the indexes that were coming up rather nicely in the RRG chart and the chart itself is breaking up strongly so we've had supported 26,000 ranging for a while up to 29,000 currently breaking up and looking heading for the September 2021 high the RSI pointing up strongly in here and then the MACD this is a weekly MACD positive and the gap widening gaining strength as it makes a breakout here looks as though it's got much more in it and I would look now for a retest of these two tops in here which are at 30,000 just above a little bit above 30,000 30,600 or so it's a bit higher just be precise 30,700 it looks very much intent it's got a look on its face like it really wants to go up and give that a look so we have to see how it behaves if it gets up to that level now going back to our theme of these strong technology stocks we first drew your attention to it back in here not in here but back in here and we've had a good run on this 15 to 200 the gap widening there we had a little bit of a stall broke out now testing the high of April last April 2022 if we can clear through that given the momentum the weekly momentum that we've got there and the RSI too pretty good I would be slightly worried about small divergence in here it's due for a correction this would be a logical place to 90 be a logical place for it to happen but I think the momentum is good and ultimately it will work higher it has had a tremendous run so it's possible but that it comes back if it does it could be well supported around the 275 area actually quite close but we'll see how this develops be prepared for that a little bit but if it breaks out then I then it could stride forward into that high around the 340 area so it's it's in the background it remains strong looking good it's extended sight loss of momentum at a resistance be cautious but there's nothing negative about it yet our meta two still very strong these two outstanding leaders here because moving averages the 50 and the 200 gap widening there long-term momentum increasing we see that also in the MACD the weekly MACD very strong now we have come up to the resistance that we identified at 240 from this high here in April 2022 and we're pausing a little bit on that we saw it on the ROG chart both the meta and Nvidia was sort of turned a little bit south although they were far over to the easterly side so it's having a little bit of resistance the RSI is stalling a little bit at this high level too it's extended it may come back if it does come back watch for support at 220 only a little bit of support but the trend I think is so strongly up here that even a little bit of support would hold it but if we can clear it look what's above 240 between 240 and 305 there's nothing there's a deep blue sky there so this means there's very little resistance and you know what that that can mean sometimes when we had no support in it how fast we moved so we might be in for a fast move up if it clears that level so watch out is a very important level in meta right now now moving to the currency markets here is a relative rotation graph daily sampling us dollar in the middle here the british pound which has been doing well has turned around pretty sharply pretty sharply it's still over to the right still doing well in a relative uptrend but it's weakened substantially likewise the euro is in the weakening quadrant and it's heading south westerly and it looks as though it's going to head into the lagging quadrant so it looks pretty vulnerable pound maybe not so much so let's have a look at those in a bit more detail so here is the euro and the euro has turned over we saw the loss of momentum in it previously having a struggle at the the highs of the beginning of the year struggling away there turning down here now the macd already crossed we've already got that weak signal that toppy signal and the rsi dribbling away here on this weekly chart it's stalled it's now beginning to take up a a downtrend in pattern it looks as though it's heading into the lagging quadrant so the run-up is clearly over more than over we saw that up in here but now it's taking a turn in the other direction now the pound once again in this case it's the daily chart but the daily chart we had drawn this trend line in here at at 127 area here actually to be precise 126 64 and blow me that June high was where we got to and we've reversed very sharply from there we're coming back towards support which is at 124 40 but the momentum has turned down according to the daily macd and the rsi looking very corrective at the very least as well so looking forward to this market remember it's a little bit better position on the rg chart than the euro which has got a very determined heading in the southwest of the direction looking like it is going to turn down and and move to into the lagging quadrant that looks extremely vulnerable this not quite yet we've still got the rising lows pattern we're coming down to substantial support i would be interested to see what happens here at the 124 50 level if it can find support here would be a logical place for its pine support and then take another attack on that June high however if it fails here and particularly if it fails these lows here at 123 65 then it's it's finished on the upside from the now and it's it's headed substantially lower but at the moment in my view this one is still corrective i'll leave it there for this week thank you very much indeed i hope you the benefit from this session it will be julius that will be with you next week at the same time in the same place so goodbye from julius and i at rrg research and may the trend be with you