 Hello, traders at CMC Markets. Welcome to a new update by RRG Research for Monday, the 7th of August and I'm recording this on Friday the 4th in the morning. My name is Julius de Campanare and I'm presenting to you from Amsterdam in the Netherlands. As usual, I will start with an overview of the rotation in world stock markets and the RRG on the screen shows you the rotations on a weekly scale for this group of stock markets. And what you can see is that inside the leading quadrant and New York Fang moving into weakening are the markets that have been leading over the last few months and they are now going through a bit of a setback where they are losing relative momentum. So that's the Nifty, in India, the S&P, the Nikkei, the NASDAQ and of course the New York Fang index. On the other hand, we have the group that has been lagging and in a way still is because they're on the left hand side and that means that they're in relative downtrends and if you're on the right it means you're in a relative uptrend but you can see that the tails are starting to pick up at least a little bit of relative momentum. So the comparison between the group on the right hand side and the group on the left hand side is that the tails are moving in opposite directions and that suggests that there is some sort of a rotation going on under the hood, moving out of the leaders of recent times and moving into the laggards of recent times. That is the bigger picture on the weekly scale. If you look at the daily version of this RRG you can see it in a little bit more pronounced way and what I'm trying to do to find trading opportunities is to see if I can find tails that are moving in opposite directions because if they're moving in opposite directions that gives us a trading opportunity to play pair trading ideas. So the ones that I want to pick out here are two and the first one is the US versus Europe and I'm going to use the S&P and the Stocks Index. So what you see here is that the S&P has been rotating through weakening and moving back up towards the leading quadrant and on the other side we have the Stocks Index, the SXXP and you can see how that has moved through improving and now starts to roll over. That suggests that there is a rotation out of Europe into the US ongoing so that could give us a nice trading opportunity. The other one that seems interesting is the one between the Hang Seng Index. It looks like a very long tail moving into the leading quadrant versus the Nifty Index and we all know that the Nifty has been doing really really well over the last few weeks, months and it's now moving into the lagg and quadrant from weakening and if you look at that rotation over time you can see how the Hang Seng is powering further into that northeastern direction whereas the Nifty has rolled over and is now moving into the lagg and quadrant. So I want to put these two against each other, look at the individual charts and see if we have some trading opportunities there. If you look at the bigger picture of all these world markets against or in price terms, not in relative terms but in price terms, you can see that they're all on the right-hand side which means that they're all in uptrends, not relative uptrends but uptrends in terms of price but you can also see that they're all losing momentum. So the bigger picture if you put it into perspective all these world stock market indexes are still in price uptrends but they're going through a little bit of a setback. Now back to our trading opportunities. If we start with the S&P 500 you can see how recently weakness has sneaked in. We broke the trend line, we broke support and it looks as if we're on the way to the next support level around 44.50 and potentially even further to 43.20, 43.30. More importantly, and that's what I'm looking at, is the relative strength of the S&P versus the equity, that's the MSCI World All Country Index. And you can see how recently that artist momentum line has started to pick up indicating that the US is improving and it's now starting to take its effect on the RS ratio line which seems to be bottoming against the 100 level. If we put that against the move that we see in the stock index in Europe you can see how the stock index did not manage to pass its resistance level just like the S&P. In other words, dropping back inside that color range there's room for downside towards for 44.45 in the stock index but more importantly the RRG lines are starting to roll over. It's pretty early but you can see how the green RS momentum line has started to put in a new peak without the RS ratio hitting above the 100 level and that's pretty crucial. So this suggests that a new down lag in the already declining relative trend versus the equity index is about to begin and that's when it's rolling over inside the improving quadrant and moving back down to lagging without hitting the leading quadrant and that's what's going on here. And that's what makes the spread the offset between the US and Europe at this point in time probably an interesting opportunity. Something similar is happening in Asia where we have the Hang Seng Index which has been an underperform for a very long time. You can see how the RS ratio line dropped below 100 back in February and it remained there until very recently. The green RS momentum line has has oscillated around 100 and what that causes is rotations on the left hand side. So what you've seen is the Hang Seng Index moving from lagging into improving back to lagging back to improving back to lagging completely continuously completing rotations on the left hand side that's what happened over these months. And right now you can see how the RS ratio line is pushing back above 100 pushing the Hang Seng Index into the leading quadrant. If you look at the price chart maybe not so interesting yet because there's quite a bit of overhead resistance but from a relative perspective definitely one of the better markets at the moment. And if you compare that with the Indian Nifty 50 index you can see how that look at the difference between those charts Hang Seng down and then more sideways. Nifty pretty much all the way up. So that's a very clear difference that's why the Nifty was leading and right now that pattern seems to be changing. Look at the move of those RRG lines. The RS momentum line already dropped below 100 a couple of weeks ago and you can see how it's now dragging the RS ratio line down as well. The price is hovering just above a double support level around 19,300. When that gives way I think that we'll be looking at levels below 19,000 for the Nifty 50 somewhere like 18,900. But the most important takeaway is the relative weakness for India and the relative strength for the Hang Seng which gives you a trading opportunity. Now let's zoom in to some individual stock market, individual stock rotations inside the New York Fang Index. Here's the weekly RRG for this universe and you can see the dominance on the left hand side so most of them are on the left hand side in relative downtrends versus the New York Fang Index and that means that it was carried or it's driven by the moves of Tesla, Meta and Nvidia. But here also you can see some of the rotations that are ongoing and most importantly I think or the ones that that have my attention are the moves for Nvidia which is inside leading but hooking shortly back down and the move of Meta which is inside the weakening quadrant but starting to pick up relative momentum quite quickly over the last few weeks. This is a weekly RRG and then you can see AMD moving into the lagging quadrant. That's not good and Netflix picking up. For trading opportunities I'm always looking to see if I can find alignment between the daily and the weekly so if you obviously you want you want them to move in opposite directions because that's where that's where the spread is coming in that's where your potential to generate alpha is coming in but when you can find an alignment between the weekly rotations and the daily rotations that gives you more confidence gives you more strength of the move and the ones that I want to point out here is especially the move between Meta and Nvidia because when we look at the daily RRG and you look at the moves of Meta and Nvidia they're pretty much on the same path and this is a daily RRG. The previous one was a weekly so you can see how the weekly improvement of Meta has translated in Meta moving into the week into the leading quadrant on the daily RRG whereas the weakening rotation of Nvidia on the weekly has translated into a move of Nvidia into the weakening quadrant and you can see how the arrows how the tails are moving in opposite directions very clearly showing how the spread between Meta and Nvidia is going. So if we look at the individual charts and let's start with Nvidia then obviously that chart is still there's no problem with that at all it's still a very good stock for the long term. We all know that big gap that's a very strong support area but we can also see that the recent trend channel that has emerged after that gap now is broken so that little trend line is broken but more importantly is broken below its previous low so it looks as if we got a new series of lower highs and lower lows ongoing and that's confirmed by the rollover of the RRG lines which are now pointing lower the RS momentum line is already below 100 and it's starting to drag or roll over the RS ratio line so that suggests an upcoming weakness under performance of Nvidia versus the New York Fang index and then we've got Meta on the other side which by the way look at this trend channel this is a very regular nice good strong trend channel so there's nothing wrong with that but within the channel there's definitely room for some downside from a price perspective look at the relative here look at the RRG lines and compare that to the ones in Nvidia we saw Nvidia rolling over and here you see the opposite you see Meta on a relative basis starting to pick up strength it's all it was already in a relative up trying to pick it up we went through a bit of a setback through the weakening quadrant when the RS momentum line dropped below 100 but that's now going back up and now both RRG lines are back above 100 pushing upward so despite the fact that there is downside potential in terms of price from a relative perspective Meta is expected to do pretty well against the New York Fang index where Nvidia is expected to do less well versus the New York Fang index and look at the you know the rotation here the price price move lower highs lower lows and how Meta is still in that rhythm of higher highs higher lows so that's a pretty good example of opposite rotations on the RRG which are confirmed on the price chart and an alignment of the weekly and the daily tails that's also a pretty significant addition contribution to the strength of Meta and the weakness of Nvidia and the last one is one more stock that I want to put your attention to and that's because it's also look at Microsoft here on that weekly tail moving into the lagging quadrant or further into the lagging quadrant I've got to say and here is the daily tail and here you can see how Microsoft has rotated through improving and now back down to lagging and we all know that those rotations are the strongest those are the most reliable rotations where a tail goes from lagging into improving and then back down to lagging because it means that you're already in a relative downtrend and you're starting a new downward lag inside that trend if we look at the price chart of Microsoft and we see why that is we can see how that relative downtrend from Microsoft already started back in May we picked up so we went into improving back in June when the RS momentum line moved above 100 we shaved 100 once again and we're now clearly below it and now once again both our G lines are below 100 and the RS ratio has put in a high below 100 and that's causing that rotation inside the we the improving quadrant but now back down and this is pushing Microsoft further into the lagging quadrant and we got a very good confirmation from a price perspective where Microsoft is now dropping below support that has formed over the last since June one two three touch points on that horizontal level and it's now getting broken so that's suggesting an acceleration lower for Microsoft in the coming weeks making it one of the weaker stocks inside that New York Fang index universe and that wraps it up for this week thank you for watching and I hope you enjoyed it I'm looking forward to seeing you again next week at a new update by ROG research same time same place