 Right. Good afternoon, ladies and gents. I hope you can all hear me loud and clear. I'd like to welcome you. Colin and I would like to welcome you to this pre-FOMC webcast. Good morning, everyone. Good morning, Colin. On Wednesday, the 16th of December, and the last FOMC meeting of 2015 before we get started, I'd like to acquaint you all with the risk calling. So anything that you hear on this webinar is for information purposes only and anything that you hear should not be taken as a personal recommendation. So here we are, end of 2015. And I can't see my mind back 12 months, and I recall a conversation. You know where I'm going with this, don't you, Colin? I recall a conversation I had with you, Colin, about what to expect from 2015. And I think we both thought to be fair to you. We both thought that the Fed would find it difficult to tighten policy at a time when essentially central banks around the world were starting or still in full-blown easing mode. I just think you probably overestimated the ability of the Fed to actually deliver on its dot-plot charts, whereas I was a lot more skeptical about the dot-plot charts per se and I think a little bit unfairly compared them to a dartboard where basically Fed policy makers took a guess as to where they thought for the Fed funds rate would be any year's time and just threw a dart at it. To be quite honest, you know... It's not that far off because they don't have any recourse for being wrong. So in a lot of ways it is. I mean, their guess is as good as anybody else, I guess is the bottom line on the dot-plot. Very true. I would suggest that you and I in the market probably have a much better insight into what's going on in the markets and say 17 central bank is stuck in a room. True. I think the Federal Reserve Board and Federal Reserve policy makers can be very introspective when it comes to the US economy. So obviously what we're going to do ladies and gents is Colin and I are going to look at the likelihood or otherwise of the Fed disappointing tonight in the same way that they did in September. And I've got to say despite the fact that I don't think they should hike, I think the likelihood is that they will. Certainly on the data alone I don't think they should be hiking. Certainly if you compare it to the September data and the Fed is data dependent because the Fed is potentially hiking at a time when the data quality, the data that we're seeing is actually weaker than it was in September. Obviously the labor market data has improved somewhat but we have come off the back of a couple of fairly lackluster readings in September and October. But you put that down to the fact that people were expecting a rate rise and didn't get one. Nonetheless, I think the base case scenario for today is that we're going to get 25 basis points and then really it's a question of how many rises do we get in 2016? Absolutely. Maybe I could just pick up from here Michael on the Fed and their gem and then we can talk about 2016. Absolutely. Michael's right. When we go back three months ago the data was a lot better, no question about it. The Fed should have raised rates in September. The reason the Fed didn't raise rates in September was because they were worried about a budget crisis hitting in October and November and we saw we did get it. The Republicans pushed their speaker out of his job. They eventually got themselves into a deal with Democrats that had been perpetuated by a bunch of stopgap measures but the political side was one of the things that held the Fed off back in September. Michael's right. Some of the data's gotten better. Some of the data's gotten worse and now the Fed's in a jam because they've been telling everybody pretty much for the last six weeks they've been hinting they're going to raise interest rates. When they did that back in the summer and then the market went down and the problem is that now that you've hinted this that if they don't do it then people are going to go, what's wrong with the economy? Dudley and Yellen, two of the big three at the Fed have been going around saying, well, a rate hike is a positive thing. It's a sign from the Fed that we have confidence in the U.S. economy. Well, if they suddenly don't raise rates then people are going to say, well, maybe you don't have confidence in the economy and you can watch the stock market head could head a lot lower. So that's where I think we're at an issue. And then so now what's important is that odds are they're probably going to have to raise rates because they've signaled it and the negative impact of not raising rates at this time could be bigger in some ways than the impact of raising rates. So I think they'll do it today. But then I think they're going to bend over backwards to see that we're not going to raise rates again and that we've fought more damage for 2016. So maybe we can start to look ahead because I think now the statement, the press conference and the, actually I don't think the dots plot as much because I think it's going to come down there. They're too hawkish in my opinion. But let's go on those three, Michael, and we can discuss. Okay. So how are they, how do you see it? So basically what have we got to focus on is first and foremost the decision. The decision comes out 7 p.m. U.K. time. That's 2 p.m. U.S. time. So the decision really is a question of if they hike, do they hike by the 25 basis points that the market thinks they will and if they do, how do they then manage the message going forward because I think if they don't manage expectations lower then I think you're going to get an expectation that you're going to get two or three rate hikes next year. And to my mind that's barmy. I just do not see how you can hike rates at a time when the U.S. manufacturing sector is in recession. We've just seen U.S. industrial production slide 0.6% in November and October was revised down to minus 0.4. You've got the ISM manufacturing index down in contraction territory. The last time the Fed moved on monetary policy when manufacturing was in recession was when they launched QE1. So they were actually easing policy the last time the manufacturing sector was in recession. So it does go back to the dot plots but I think so what you're going to have is a situation whereby the Fed is going to hike but at the same time they're going to revise down their inflation forecasts and their GDP forecasts which to my mind is completely counter-intuitive. You look at the CPI numbers that we got yesterday and the CPI numbers were coming in at 2% and we saw CPI month on month all year on year of 0.5% which begs the question where are we seeing this inflation when you've got oil prices and we'll look at oil prices right now which are down since the last Fed meeting this is. The last Fed meeting was the end of October so that's this candle here and we just blow this up for you ladies and gents. So this was the last Fed meeting end of October. Since then we've come down over another 20%. If you look at US gasoline prices it's a similar sort of story. Let me see if I can find the gasoline chart. We've got the Bloomberg Commodities Index which is trading at levels last seen in 1998. So here's October. I think gasoline prices are a little bit lower than they were at the end of October, not overly much but still lower. Natural gas prices are lower. So cost of living is that much lower yet inflation in the US is picking up. Why? Quite simple, Obamacare. Physician fees went up, rental fees went up. So you've got inflation in the US but it's on essentials if you like which is healthcare insurance and what have you which people really don't have a choice about buying. So can you honestly argue that that's a significant recovery? I'm not sure that you can. Here in the UK we don't have that in our CPI number which is why our CPI is at zero and which is why the Fed is not. And yet we've got the Bank of England looking to keep rates unchanged while the Fed has got itself into a jam and is essentially hiking rates so it can cut them again. I think that's probably what it's trying to do. So what does this mean for the dollar and what does it mean to stop markets? And I think you've got a view on this Colin and you think whatever happens and I happen to agree with it, whatever the Fed does, unless they're ultra hawkish, the dollar will go down. I agree because I feel that the US has always gone up over 20% over the last year as a basket against world currencies and I think that's part of the reason why we're seeing things like manufacturing slowing and the discussion of well how much of this slowdown is because people have been anticipating for so long that the Fed's going to raise rates because it's keeping it ended over a year ago now and it's been a long time people have been expecting the Fed to start a race. Main Street has had more than enough time to respond and the US dollar has certainly done so. I think the US dollar has peaked and I think the US dollar has priced in a much more aggressive rate hay campaign than we're going to get. And I'm going to mention briefly the dot plot. When you look at the dot plot there's about 14 members have put their numbers in. About six of them, basically about half of them have put in numbers calling for essentially two to four rate hikes next year. And half of them are above four. So I'll start when you look at the dot plot today you're going to see that come down pretty substantially. But I think the market expectations are there as well. I think the US dollar has peaked and I think the one thing we will find with the Fed increase is they're going to bend over backwards to say that this is not going to be a program of the next 12 meetings they're going to raise rates like they did in the last cycle. Is it one and done? Is it two and done? Or three and done? I mean my feeling is that they've got to get themselves back up to about 1%. That's what the Bank of Canada did in 2010. They went from 0.5 to 1%. And then this year when the oil plunge hit then they went back to 0.5, five years later. History shows that was a mistake though Colin, wasn't it? History shows that was a mistake. History shows that was a bit of a mistake though, wasn't it? It was perfectly fine for the economy for five years when they got caught with the oil price plunge, right? They didn't do, they cut rates when the oil price collapsed. So it wasn't because of monetary policy or anything. It was the right move. It was that they got hit by the external factors. So just to continue on the, so the dark plot I think is going to come down, I think you're going to see them bend over backwards to say that we're not going to raise rates right away. It's going to be slow. It's going to be gradual. And interestingly, I think you and I have both looked at the speech from Governor Brainard. But you've looked at her more short-term and I've looked at what she said more, with a longer-term perspective. And she gave a speech about three weeks ago that basically talked down expectations for the long-term hikes where she was saying the previous neutral rate for interest rates was around 2%, 2.25%. This cycle it's more likely to be 1.25%. And I agree with her. And I think that's why I've said I think you'll get three hikes in 2016. I think that's my limit also, though. That's the high end. I think that's the maximum you're going to get in 2016. And I think anybody who's calling for more is way too aggressive and that's going to come down. I know you're lower than me. I think three is pretty aggressive. Yeah, I know. That's why I say it's the high end of what I'm thinking. I went with three and I think you'd agree on one. You probably get me to stretch to one. And I have very good reasons for thinking that. First and foremost is that in the second half of next year, the Fed is unlikely to move simply because of the presidential election and uncertainty surrounding that, particularly if the candidates don't change on the Republican ticket. Because I think if the Republican ticket continues to carry Donald Trump, then I think a lot of investors are going to get very, very concerned about the U.S. economy. And I think that's going to make it much more difficult for the Fed to tighten. So if the Fed is going to tighten next year, then really, they need to do it early. And it's going to be in the first part next year. And how many meetings does the Fed have in the first half of 2016? I think it's four. One in January, one in March, one in April and one in June. April and June. So when I called for three, and my feeling is when I say it's the aggressive end, is because I based that on a hike in March, a hike in June, and a hike in December. The hike in December could easily get knocked off. To be honest, you may only end up with one of the two hikes in the first half depending on how things go. But that's what the kind of plan I've gone with now, and I've said, I left out September on purpose because they won't do it in September and they won't do it in October, because that's when the main election campaign is underway after the convention and before the vote. So those two meetings are out for sure. I think they're looking by iffy. I may generally hike when there's a press conference. Though I don't have to, but generally if you're guiding, then a press conference is the best way to articulate a move. Because if you move on a meeting without a press conference and you schedule a press conference, everyone's going to know what you're up to. Yeah, exactly. That's why I went with March in June, which are press conference meetings. Which suggests to me too, but there again, we had this conversation last year and I didn't think that they would hike this year at all. So it looks like I was only two weeks out. But having said that... Yeah, that would be an excellent call. I mean, having said that, I'm looking at the data. If you look to the data in isolation, irrespective of all the noise surrounding it, and you looked at it, would you say the Fed was going to hike today? And I would suggest looking at the data if it happened any other time during this year, the Fed wouldn't be hiking. The only reason the Fed are hiking is because they back themselves into a corner and if they don't, they'll look weak. Yes, I agree with you on that. The negative signal of not hiking is worse than the actual hike at this point. So they've just got to do it and get it over with. Yeah, so basically it's like pulling off a bandaid. They've got to do it quickly. So for me really, it's a question of where are the key levels that we need to keep an eye out for in the wake of the decision tonight? Of course they could hike by only an eight or they could remove the lower bound. I think both of those are certainly possibilities. My concern would be that if they did it, I mean they could and then they could see that they've done what they've done. My concern with that would be just that I think the market's expecting a quarter point and I suspect anything less would be problematic for stocks. I think what we've got to look for here is will it be a unanimous decision? If it's not a unanimous decision, how will the markets react? If it's say for example a 5.5, say it's a 6.4 split, how does the market react to that? If it's a 7.3 split, who are the policy makers who are most likely to defend? For me it's Brayden, Terulo and Evans. Can I add to that, Michael, that of those, if Evans dissents, I mean he's been dubbed for a long time, he's a regional Fed president who's rolling off after this meeting and so I don't think people would concern too much about Evans, but Terulo and Brayden being permanent governors, I think people would take notice if they dissent. I think so too and to be quite honest, I would find it hypocritical for Brayden or Terulo to be so articulate in terms of pushing back on a rate hike to then acquiesce to it. So for me, I don't think that anything wanted that. Yeah, it's a funny one with the permanent governors because sometimes they seem to, usually when they talk, they're then involved with the party line so it's a funny one there. That's why I say if they do dissent, I think that people will definitely stand up and take some notice. So I think the voting patterns will be important certainly in the context of the overall decision. Okay, so that brings us on to basically the charts and I've done a couple of videos in the past couple of weeks with respect to obviously the surprise ECB decision and I think obviously the ECB decision has given the Fed room to move. I think that was part and parcel of why the ECB were as little bit wishy-washy as they were. So what does that mean for Eurodollar going forward? Well certainly if we look at the weekly charts and this is something that's got me a little bit concerned, we've got a bullish weekly reversal here and we also got a daily reversal. We're back above 108-20, which was the previous support. If we change the candle back to a daily, you may have noticed that yesterday we got a key day reversal which was significant certainly in the context of reversing closing below the lows of the last two days but in the context of the bullish weekly reversal I think we could get a move back to 108-20. I would be concerned for the upward scenario in the Euro if we push back below 108. Yes, we do have significant resistance between 110-40 and 110-50 which is where we have the 100 and 200 day moving averages and that's what's capped every single rally thus far, one, two, three. So I think the weaker side at the moment is probably for a drift back lower. The research wouldn't be unusual. That was a massive, massive rally that we had off of that 105 days and certainly with that kind of a move then, you don't back and fill that in a couple of days and a retest of that 108-20 wouldn't be unusual but more than that if you started busting 108 I think would be problematic. I'm just looking here at your stochastics and seeing that it has gotten a little bit overbought there and you could see that roll back down so that also would suggest a retest. Yes, it would. But what's most interesting about this chart here is this purple line here which the candle in early December, the very strong upward candle that we saw in December on Thursday, the first Thursday when the ECB met, that's the trend line from the all-time lows in 2002. That trend line comes in and cuts that line right there. So that level there is huge. It's massive. If we break below 105, that breaks the uptrend line that the euro's been in since it made those 82-30 lows in 2002. So don't underestimate the importance of where we are right now. Now, the ECB doesn't want a significantly higher euro but by the same token, the US Fed doesn't want a significantly stronger dollar. So something has to give and given the state of the US manufacturing sector, I think the dollar, given the direction of travel, they won't want the dollar index much above 100 which is basically where it was at the beginning of the month and that was certainly an early indication there. So we're at a very, very key level in terms of the euro against the dollar and why are we looking at the euro against the dollar relative to the dollar index? Because the euro makes up around about 57% of the dollar index. So there is a good correlation between the two. Furthermore, Colin, did you want to say something Colin? I was just going to say the rally up off 105 for the euro and that successful test also coincided with the peak of the US dollar index where it just bumped up above 100 briefly and then rolled down. I think you're right. I think there's going to be a massive wall of resistance at the 100 level for the dollar index and I think, well I mentioned before, I think the US dollar is now probably peaked and it probably starts to work its way down the euro, it works its way back up a little bit. Let's do Goldberg to bring that up. Gold will be a big trader today as well on this. Let's look at the Goldberg. Because what happened a couple of weeks ago in the wake of the ECB hold was we posted a key reversal week on Gold and yeah, we have struggled to rally significantly but we're still above the 2010 lows, 1044. So what we don't want to see here is a four below them but furthermore, what we've got here is a little bit of an oversold situation on the weekly stochastic. It is starting to turn positive but it's not positive yet. So certainly it's not a strong signal. What we want to see on Gold is for it to break above the 1100 level but what we don't want to happen to undermine a bullish scenario or a rebound scenario is for it to drop below the open of this candle here which posted the reversal in the wake of the ECB move or the move two to three weeks ago, which when we saw a significant rebound. I've been telling people when I do my weekly Gold day look that you can't rule out a trip down to $1,000 on Gold because you've gotten so close to it. It's just a big psychological level that's been sitting out there drawing Gold towards it. But realistically, with the U.S. dollar peaking and the way the euro's been acting and then Michael's been saying the way this is bottoming out here, as far as I'm concerned, if we don't see a $1,000 Gold within probably today or within say the next couple of days, we're probably not going to see the $1,000 Gold anymore. Gold does look like it's base building. I've been calling 1000 the washout scenario or the shakeout, but if you don't get that, Gold otherwise looks like it's base building and should start to trend higher as the U.S. dollar starts to come lower. The question is do you get that washout or not and the longer it takes the less likely we'll get it? But at the moment we are still trending down so there is no evidence that we are going to rebound. That first evidence will come if we break above 1,100. There's also a significant key level on Brent. I sort of touched upon it a little bit earlier when I brought up the Brent chart, but let's bring up the Brent daily chart now because that also suggests that we might see a little bit of a rebound here. If we look at the daily candle chart here, that lower line that I've drawn through the lows there actually coincides with the lows that we saw all the way back in 2008 here. You can see that there. So direction of travel, key direction of travel, it is very much towards the downside. We can see that quite clearly on the monthly chart. We can also see it fairly plainly on the weekly chart. But let's look at the daily chart. And the daily chart, look at how long that shadow is there. That suggests that the market's worried about being overly short. Yes, we're still in a downtrend, but certainly in the context of where we are and where we've been, oil is cheap. That's not to say that I'd be tempted to buy it at these levels, but the risk reward would suggest that there's potentially more upside in buying it than there is in selling it based on the historical price action simply because we're above long-term support on Brent crude and the fact that we didn't stay very long down near that $36 a barrel mark on Brent. So I would be overly cautious about buying into the hyperbole around $20 or $25 a barrel oil. We're already there on $20 or $25 a barrel oil in other trades. Just because we're not there on Brent doesn't mean that we'll get there. And it's all about trading the price action. The price action here is telling me to be cautious about going short oil because you're very near a very, very key support level and the potential for a short squeeze is very, very high. Yes, and could I talk to that with WTI, Michael? You can. So we had WTI has come down and retested $34 to $35, which was right around the 2008 lows. It went, it dipped below it briefly and then has bounced back nicely and it has been on the rebound. We're showing oversold on the stochastics, but I do get a lot of calls from people, particularly journalists, asking me, so Colin, what do you think about $25 oil? And people have tossed that number out there. And I said, well, if you were to break 30, you'd probably drop into the 20 to 30 area, where you end up, who knows, right? Because what you'd probably have is a big flush out of stop losses, a big plunge down, and then you'd probably see it come back. So what level it actually ends up bouncing off of would be hard to see. If the amount of oil go down, it would probably not, below the 35, and particularly if it went under 30, you would not see it see down there very long. You would probably see it bounce back up into this 35 area again. And then I get the other part, which we'll be discussing for a long time to come, is what's going to happen for the long term. And even with this supply war that they have, we will get, we can get short squeezes and nice pops and nice rallies and certainly something we want to be watching for. But I think also that the days of the $100 oil are pretty much gone for the next several years, but I think we will get some trading swings in oil, and that's something we want to be able to take advantage of as traders is to watch for when are we oversold and when can we get a pop. But when we get a pop, don't think this is the beginning of a new bull market and oil. Look for the point of when do we then take our profits and then trade the next swing. And I think that's the approach we want to be taking to crude for really for the next several years. Yeah, I suppose in the context of your comment that we'll never see $100 oil again, obviously a lot of that. We'll prove five to ten years. Yeah. In terms of what could cause that, I mean barring any geopolitical shocks, I would add as a rider to that statement because if the Middle East goes up in flames, then all bets are off. Because a lot of the oil producing countries are in the Middle East, and at the moment they're suffering as a result of low oil prices. And if that continues, then it's going to be much more difficult for these countries to look after the poorer elements of their population. There's going to be potential for an awful lot more discontent, and as such the region, which is unstable enough as it is, has the potential to become even more unstable, irrespective of whether or not Iran's oil comes onto an already oversupplied market. So yeah, but if the fundamentals stay the same, absolutely no reason for oil prices to go back to $100 a barrel. But as we all know, fundamentals can change very, very quickly, and I'm minded to wind my memory back to around about five years ago when people were talking about peak oil just before the shale revolution took off, and people were talking $130, $140 a barrel. Now we're $100 a barrel below that. So, you know, and it was only just over a year ago that you had the Scottish Parliament as they were pushing for independence, saying $110 a barrel, yeah that's fine, it'll be there for quite some time to come. Now their fiscal plans are in tatters and they're having to completely rethink everything they knew about oil prices and their potential income stream. So just because something looks obvious doesn't necessarily mean it will continue to be the case. And we just had some latest inventories come out for crude, a huge build of 4.8 million barrels. We were expecting a draw of 1.5 million barrels. So let's just see what West Texas does on the back of that. No surprise there, a quick spike all hour. But I don't think that's really too much of a surprise. So that's your oil prices. Also, I think if you're looking at copper prices, there's a similar sort of story playing out. This $2 a ton level is very, very key in the context of where we go to next. And this is where we were very, very oversold on copper at the end of November. And we've worked out that overbought scenario, but look the way that we've overbought, look the way we've overworked it out. We've pretty much gone sideways. We haven't rallied that much. And I think this is a concern. When we look at a chart and it's oversold and it starts to rally, it doesn't need to rally particularly hard to become less overbought. It just needs to trade sideways. So it's important to bear that in mind when you look at the fundamentals and you look for a rebound. $2 a barrel, we struggled to even go, not $2 a barrel, $2 a ton. We struggled to get much above, or an ounce rather, we struggled to get much above $2.10. So we haven't really gone that far. Iron ore again, this looks very, very weak. Unfortunately, I don't have a chart, but Sam Walsh, the chair of Rio Tinto, said that $30 a ton for iron ore when it was around about 55 was in the realms of fantasy land. Well, it's been as low as 38. So that fantasy land could soon very, very quickly become a nightmare for Rio Tinto and BHP who are pretty much the last men standing when it comes to the big global commodity providers, Glencore, Anglo-American. They've all been in the news for all the wrong reasons. And I think that's another reason why I think we, when we're talking about significant rate hikes, the Fed is going to be constrained by the fact that there's an awful lot of leverage out there in the mining and commodity sector, and a lot of mining companies and basic resource companies will find even a modest rise in interest rates are very, very painful. Yeah, I think that will be the key for a lot of them, especially with all the money that the Fed has pumped into the system. And that's going to be a whole other conversation that they're going to have to have eventually, is what do they do about their balance sheet? But for now, I think they're just focused on interest rates. They pretty much all said that they're not going to do anything about their balance sheet for a long time after they start raising rates, and we saw how long it's taken them just to start raising rates. Indeed. So let's look at the FTSE 100, the UK 100, because we saw a bit of a breakdown earlier this week, or the end of last week, below that 60-50 level. But we were unable to take out the lows that we saw in August, but we actually stopped on a nice little trend line just below 5,900. Now, what's important about that trend line is should we have a look, ladies and gentlemen, because I actually stumbled across this quite by accident. And if we basically take it from the 2009 lows, look where that trend line comes in, right on the money from where we rebounded earlier this week. So a big, big level on the FTSE 100, trend line support from the lows 2009 at a very, very key level. What we want to do now on the FTSE to confirm that we've got a bit of a base in is to really regain a foothold above 60-50, 60-50, push on back to around about 6,300. But to be quite honest, I don't think we're really going anywhere on the FTSE at the moment. We can go back to 64-50. 64-50 was 61.8 of this decline from the peaks that we saw in April to the lows that we saw in August. So at the moment we're in a little bit of a range. We're probably nearer to the bottom end of the range than the top. But ultimately, I think it's going to take something pretty substantial to push the FTSE lower. But if we do break below the lows that we saw in August, then we could go quite a bit lower. And that's a big concern, I think. So what's next? Let's look at the S&P, because I think that's going to be quite important as well. S&P again, that 1995-2100 level. Again, we've dropped very sharply in December, and we've had a little bit of a rebound. Again, it's not surprising. We're running into the 200-day moving average. So we really need to get back above that. That level is around about 2065-2070. It's around about that peak there. So if we get back above 2070, then we'll go and have a little run at this trend line resistance from the July peaks at 2137. So again, go on. Looking at the patterns on both the S&P and the FTSE, I think it's quite interesting because we are seeing some retests of support, which is encouraging. We might see a range bound in the near term, but so far, markets do look like they're mostly just digesting the moves up we had back in October. But we'll see if that's able to hold. RSI is kind of down, or sorry, Stochastic's down about their previous low. The Stochastics on the FTSE were oversold. So we are getting a nice trading bounce here. But at this point, we're still kind of range bound, looking at more swing trading at this point in time. And we need to, whichever way we go out of this range, I think it'll be quite significant, but at this point, we're still range bound on both. Go ahead, Michael. Yep. No, that's pretty much, you've just articulated my thought processes. It's a similar sort of story on the Germany 30 of the DEX. Again, we're rebounding from an oversold position. What was significant about this particular rebound here was that we rallied from 9,300, came back from the peaks at the end of November, hit 61.8 retracement pretty much on the money, and have now come back. So now, really, it's just a question of where we go to next, and we get rid of that line because we no longer need it. But certainly in the context of where we've come from, I think there's going to be a significant amount of resistance, roughly a little bit higher than that, probably around about 10,600, and obviously the 50-day moving average. But again, it's a similar sort of story. We've got this trend line coming in from the lows. If I take the chart all the way out, we're looking at the 2011 lows, so it's a little bit more long-term. But certainly, if you look at the structure of this particular move, if this is a wave one, I mean, this could be an actual ABC, but I don't think it is. I think this is a wave one. If this is a wave two, then this could be potentially a wave three back down again. I'm not a big fan of any wave, I've got to say. And certainly, if you draw a line through here, there's certainly plenty of resistance up at 11,400, and the current rebound could take us all the way back to 10,800 and the previous fib level of around about 50%. So again, there's nothing conclusive here. You look at the weekly chart. The weekly chart is overbought and trending lower, but the daily chart is oversold and trending higher, or looking to trend higher. So what you've got here is a little bit of a mixed message. To me, it suggests we'll get a little bit of a rebound or maybe even a bit of a sideways trend between here and here, and then a fresh move lower. Yeah, I think you're right with that. It's hard to see how much you can get a trading bounce here, but when it's overbought on the weekly, it's hard to see how far it's going to get on the bounce. That's the thing. I think a lot will depend on the euro. If the euro rebounds strongly, then that's going to weigh on the DAX. And vice versa. If the euro looks weak, then that will be fairly supportive of the DAX. If the euro starts to rebound, then that actually could weigh down on the DAX because a weak euro is good for German exporters and they need all the help they can get at the moment, particularly with the fact that they're two biggest markets, China and to a lesser extent, Japan are showing some signs of weakness or have been showing some signs of weakness. So there's that. And then there's, of course, our old favorite, the Chinese currency, which if it continues to decline, though it has actually come, enjoyed a little bit of a bounce back in recent days, but it's at five-year lows, Chinese currency. China need a weaker currency. That step that they took at the end of last week to create a basket, four to one, I think is another way for them to weaken the currency because particularly against the euro and against the Japanese yen, they have been hurt by the fact that it's been pegged to the dollar, which has meant essentially the decline that we've seen in euro-dollar from 140 to 104 has really hurt Chinese exporters because it's also hurt that the euro's also declined against the Chinese one as well. And that's why their export data has looked so weak and it's the same token against the Japanese yen. The two biggest money printers of the last three years have been the ECB and the Bank of Japan. They've got the two weakest currencies and that's hurt China because of their peg with the dollar. They need to loosen that peg and they will loosen that peg to become more freely floating. The Chinese one will weaken. That could reinforce deflation repressions across the globe and as such, keep inflation low. Yeah, I agree with you. I think that particularly the Yuan's performance against the euro and against the yen because it's been dragged higher with the US dollar is a real problem for them and it's probably one of the reasons why their economy has been slowing so much and underperforming over the last year or two. No question about it. They need to weaken and I think that move away from the US dollar towards the basket would be something that they really need to do because they're getting killed with the US dollar. Even if the US dollar comes off and they come down a little bit, they need to come down a lot because the export sector of China is a much bigger chunk of their economy than the export sector of the United States and the US is struggling enough as it is. You can just imagine it's flattened down. And if you look at the euro against the Chinese or NIMBY, it's down around about 14-15%. So that gives you an indication of the squeeze to margins for Chinese exporters by the fact the euro is 15% weaker against the NIMBY, 20% weaker against the US dollar since 2014. Yeah. Okay. Ladies and gents, do any of you have any questions, anything that you'd like Colin and myself to go over that we haven't already covered? Do you want me to cover the Canadian dollar, Colin, or do you want to cover the Canadian dollar in the wake of this? Sure. Let's talk about the Canadian dollar. Oh, my word. The movies had a massive, massive run up here. That's not perfect. It's up into the high 130s. No. For the most part, it's been tracking the oil prices. As the US dollar has gone up, and the price of oil and the Canadian dollar have gone down, so dollar CAD, of course, has exploded to the upside. It's in a big uptrend. It is really overbought in getting due for a correction. So what's the two things that could turn around dollar CAD? One is the US dollar comes down, or the price of oil rebounds. If the price of oil was to sink again, that's a dollar CAD higher. If the US dollar starts to come down, that can bring it down. So you might get a correction back to this recent breakout point, which is... I can't read that. Is it 1136? 137. The 134.50 was the previous high. Yeah. Yeah. And we are getting a negative divergence with the stochastics there at the bottom. You are getting lower highs in the stochastics, higher highs in the pair. So at some point we'll get a reversal. Does it start today with the Fed? Do we get a relentless market about 40, and then it peaks out and comes down? It's hard to say at this point, because it's in an uptrend. It looks like it's ready for a correction, but who knows when we're actually going to get it. When we do, though, as we saw with the euro and as we saw with crude oil, that when these markets get overextended, the snapback rallies can be pretty quick. So it isn't something you'd want to be looking at at going long here either. It's a matter of what you... If you're long, you want to be looking at where do you take profits, and if you're short, and if you're looking at going short, you're looking at where do you want to try and take advantage of the correction. But at the same time, if you try too soon, you could get run over by a steamroller. So it's kind of a hard one to call here. Two words. Euro, dollar, fourth of December. 105 to 109 in the space of a day. That gives you an indication of how the market can suddenly turn on a dime and come back and buy you very, very hard. So, yeah, I mean, absolutely. Do you certainly look at these two doggies here? That suggests there's a lot of indecision. That weak draw number is pushing it higher. The big level's 139.89, 139.90. That's the 2004, allows Canadian dollars, 2004 highs US dollar against the Canada. So that's the next key resistance level. Just been asked if we've gone over the Germany 30 yet. We have done, but we can go over it again if you so choose. Let's have a quick preamble. Germany 30 or the DAX. We talked about 61.8 for the natural retracement level of this move here. It's now looking potentially, I think, a little bit overbought, sorry, oversold. Starting to look as if it's going to tick a little bit higher. But overall, I don't really see it rallying much above 10,800 between these two lines here. And overall, I think it's very difficult to pick a direction for it. I think we're probably going to range trade between the lows that we saw earlier this week and the peaks that we saw on Friday of last week, around about 10,600, 10,700. Another reason why I think that the euro could be jewelry bound is this chart that I covered in a video a couple of weeks ago. And that's the German two-year. Look at the reversal on that, bad boy. Again, that was ECB day. A nice reversal. But look at the reversal on the weekly chart. We basically wiped out the gains of... This is the weekly chart. We wiped out the gains of one, two, three, four, five. Five weeks in one day. So I would not expect to see this go higher given the fact that the ECB generally doesn't buy bonds with a yield of less than 0.3%. Currently the two-year, the German two-year is above or below minus 0.3%. Thus, I would suspect that if European economic data continues to improve, this will start to drift lower. And as a result, we could see yields start to drift higher back towards zero. That should be Euro supportive. Assuming, of course, that Mrs. Yellen tonight isn't hawkish and that's really the big unknown. We don't know the answers to that question yet. Okey-dokey. Is there anything else that you guys would like us to cover? Because if not, that's it for this year. We won't be doing any webinars now until 2016 when we do non-farm payrolls on the 9th... Is it the 8th or the 9th of January? First Friday in... It's the 8th. It's the 8th, is it? 8th of January. 8th of January. So unless there's anything else, ladies and gentlemen, I'd like to thank you for your time and your support this year. I hope you all have a great Christmas and new year and hopefully you make lots of money if you choose to trade over the FOMC. If you choose to trade over the FOMC meeting tonight, I would caution against that. I'm going to be sitting on my hands and wait until all the noise that was down and then decide. I think in the first few minutes after you get the report, you're probably going to see some pretty sharp swings in both directions before people figure out what it really means. I think it will be about 12 hours before people figure out what it really means. Because they'll look at the dot-plots, they'll look at the descents if there are any, and then they'll look at the forecasts for inflation and GDP and then try and draw a conclusion as to how likely any more rate hikes are. That won't happen in the next... That won't happen in an hour. So there you have it. Yeah, no, you're right. I think markets will be active probably right through into the weekend, almost. Yeah, and then that will probably be it until January. All right. Okay. Thanks, ladies and gents. We have recorded this, so if there's any part of it you want to listen back, I think this should be up within the next 24 hours. Otherwise, I'd like to thank you for your time today and wish you all a Merry Christmas and a Happy New Year. Thanks, everyone. Happy trading and Merry Christmas.