 Hello Traders at CMC Markets. Welcome to a new update by RRG Research for Monday, the 29th of August. I'm recording this on Thursday, the 25th after the close in the US, so before the opening of the European markets on Friday, the 26th. My name is Julius de Kampena and I am presenting to you from Amsterdam in the Netherlands. As usual, we have a quick look at the rotation of international stock market indexes and at the screen you see the rotation of a group, the daily RRG for a group of world indices. And what caught my eye is that there are some opposite moves going on. This obviously is a near-term chart, so we're talking about the next week, maybe two or three weeks that this rotation is likely to continue. And what we see here is a strength for the FTSE, for the UK, for the Australian ASX, for the Nike, for the Japanese Nike, we talked about that a couple of weeks ago. The Dow Jones industrials, S&P to a lesser extent, it's already rolling over. But what's more interesting is the negative rotation or the weaker rotation for the Russell 2000 RTY and the NASDAQ 100. So even if you just would like to stay inside the US, you could look at two pair trainings and offsetting opportunities between let's say the Dow Jones industrials and the NASDAQ or the Dow Jones industrials and the Russell 2000. If you want to do it more internationally, you would be able to look for positive returns in the UK, in Australia and in Japan. I would leave the European markets for the DAX, the stocks, the CAQ out of the equation for the time being because they're still inside the lagging quadrant. They're picking up some momentum, they need to prove themselves a little bit more. If we look at the individual chart, I think the chart of the NASDAQ is interesting to study right now. It ran into resistance around 13,600 and then fell back. And that started happening at the end of last week and at the start of this week. And you can see that it dropped out of that trend channel and again, former resistance acted as support. Thing is that we now have a big gap here between the 19th and the 22nd. So that's the weekend. So that's from Friday to Monday. So this was the weakness at the end of last week. And then we opened on Monday quite weekly and then we consolidated and we're picking up. So this is today when I'm recording this. This is the Thursday. We obviously will run into gap resistance here around 13,200. What's interesting is that the RRG lines, the RS ratio, the red line and the RS momentum line, the green line are both heading lower. And that's causing the rotation on the RRG moving into the weakening quadrant for the NASDAQ and heading towards lagging. So this suggests that the NASDAQ, at least from a relative point of view, will remain under pressure. And there are better opportunities, for example, in the Dow Jones industrials or Australia or the Nikkei, what we just saw on that RRG. We'll have a look at maybe an offset or a pair trade in the written article that comes with this video. Another thing that I would like to point your attention to, and we've done that before, but it remains an interesting topic, is the rotation of currencies. And here you see the RRG, it's a weekly RRG. So it shows you long term rotations for a bunch of currencies, all versus the US dollar. So the center of the chart here is the US dollar. And what this tells me is that there is absolute dollar strength going on. There's a little bit of a hiccup here, but it's all taking place on the left hand side of the graph. The US dollar is absolutely showing strength. And that is best visualized on the monthly chart of the euro-dollar relationship. And this is going back to the 1980s. What we see here is we are now hovering around parity in euro-dollar. Well, the break below 105 was a big trigger, and accelerated lower. And now we're playing around with that 100 level, actually a little bit lower, 0.995. And you can see here that this was a level in January 1983, acted as resistance in March 1986, came back, hesitated a little bit in December 1999, dropped below it, came back, kissing resistance again in June and July 2002, breaking higher, showing all that rally. And now again that one level, that parity, coming back as a support level. The conclusion, at least for me, is that the upside, so this is a downtrend. So the upside potential for euro-dollar is limited. Give it 104, 105, back to these old lows. For the time being, 0.99 something, or if you wish, parity will provide some support. As if and when that gives way and euro-dollar drops further. I think we're in for another move lower, let's say towards the middle of this consolidation area that took place in the start of the 2000s, so 2000, 2001. That is 90 cents, euro-dollar at 90 cents. That is a very important, market is a very important thing to keep in mind, and it's a very, if it happens, a very tradable move. And then I would like to have a little look at one of the RRG share baskets, the SPX500 RRG momentum plus share basket. This is one of the seven share baskets that is tradable on CMC markets, and the underlying strategy for all those baskets is designed to outperform their benchmarks, their respective benchmarks over a longer period of time. But of course there are always periods where that doesn't work, and I specifically want to focus on the 500 share baskets for this week. If you look at the page where you see all the information about the share baskets, you've got a graph that shows you the returns, 40 share baskets over three different periods of time, 30 days, 90 days, 180 days. And you can see here that over the last 30 days, the share basket performed over 20% and the market did almost six. So that's a nice out performance. If you look back over 90 days, the share basket lost 1.7 and the market gained six. So over that period, the share basket underperformed by about 7%. If you look at 180 days, you can see that the share basket picked up 16% and the market lost 1.8. So that's a good example of longer, we're still good, but you see that big drop here from August. And because you can see the composition of the share basket, the individual shares that you can see here, you can do some analysis on maybe why that is. So these stocks are all energy stocks. And of course, that is a big impact. So it's an aggressive strategy. Please be aware of that. It can be aggressive to the upside, but when it goes wrong, it's aggressive to the downside. And that's what you see, which is so happening in that 90 day period. That started to decline right after the rebalancing that took place at the start of June. When we bring that information, that composition of that share basket to an RRG, then we can start to look at the chart of the RRG chart of the US sectors. And because they're all in the energy sector, of course, the tail of the energy sector index is important. And what we see is that the rotation through the weakening quadrant seems to have come to an end. And it started to curl back up. And that is always an interesting rotation because we know that tails that rotate through weakening and then curl back up without hitting the lag in quadrant usually provide strong signals because they indicate a resumption of the existing uptrend. And we can do the same with the composition of that share basket. So here, I took all 10 names that are in currently in the RRG momentum plus share basket for this quarter. And what you can see is that when I scroll this back, this is a weekly RRG, and when I scroll this back to when the rebalancing took place. And that was at the start of June. So right here in this week, you can see why these stocks were selected to come into that basket. Obviously, some bad luck or the drawback of being able to only rebalance once every quarter, you can see that the rollover took place shortly after the rebalancing date. And the energy sector, including these stocks, went all through a setback. They remained at the right hand side of the graph, which is strong. And some hit the lagging right now. And you can see that now they are starting to pick up again. And I can make that even stronger that view when I change it to a daily RRG for these stocks. You can see the recent strength in the energy sector picking up in all these names that are currently in the RRG share basket. And that explains why the 30 day period is so good. It also explains why the 90 day period is so bad because that includes the rollover when we went through that rotational pause, that rotational setback, and we're now picking up again. So all in all, I think that this share basket with the current composition still has some good weeks ahead that we still have a month to go. And with this information, you yourself can decide whether you would embark on this strength in the energy sector by buying the 10 best stocks inside the energy sector through the RRG share basket, or you want to play the share basket against the S&P, or maybe some individual stocks versus the share basket. There's lots and lots of possibilities to make that work for your personal situation. And this wraps up our contribution for this week. Thank you for watching. Looking forward to seeing you again next week. Same time, same place.