 So, yes, welcome to this week's CMT markets charting analysis webinar. Got the risk warning on the screen here. We'll just zoom through that. Any questions at any stage? Best way to just send it through the chat window. You can do it to all publicly, or you can just send it privately straight to me, either way it works. And then I can address those as we're going along or just cover them at the end. Quite a busy week ahead of us, actually. There's a few things going on. We've got a fair bit of Chinese economic data coming out. Obviously, China's been one of the major headwinds and it's slowing economy this year. Those concerns seem to have abated in the past few weeks, but this is quite a flush of data, including the GDP report this week. So that could change things. It's unlikely to because China's currency has become more stable. Obviously, we have the offshore rate. It's not as liquid. It's a bit harder to trade than some of the major currencies, but the default is the dollar C and H pair here. And you can see that after depreciating rapidly, it's kind of come back in line and it's at the lowest levels this year at the moment. It was those currency concerns that were biggest concern about markets and it was the slowing growth type dynamic that kind of exacerbated that, but not by itself. China's economy's been slowing for a while, so there's nothing new this year. It was this sudden ramp up in dollar C and H and dollar C and Y, the onshore rate that really got people worried. That's pulled back largely because of dollar weakness and so those concerns are off the table at the moment. And that dollar weakness has helped a lot of things. Obviously, all prices still very much a factor. We're back up above 40 in Brent. This week we are a bit less in the way of central banks. We've got the Bank of England on Thursday, so Cable looking a bit hairy today despite a lack of economic data really driving things. The political situation is actually playing into Cable more than it normally would. When I say Cable, I'm talking about the bridge bank against the dollar obviously. And it's the beginning of US earnings season, so we saw a bit of a pullback last week in US stocks, one of the biggest pullback since we put in a low in February. We'll have a look at the S&P and the Dow, Gengen II or our versions of them obviously. And we'll see what the dynamic is there. The US market's been pretty solid given the fact their expectations have been paired right back in terms of how much US companies are going to earn on aggregate. So today we've got Alcoa reporting, that's a sort of unofficial kickoff of US markets. But earnings expect to drop about 8% year over year. But nonetheless, we're at multi-month highs, highest this year in US stocks. I'll pull up the old, since I've talked about that, I'll pull up the S&P at the moment. Still that's a weekly chart. We can see that we're still inside our range and we're at the top of the range. Again, a lot of that because of the weakness in the dollar because of a bit more dovish Fed policy, only looking at probably two rate hikes this year whose consensus. And these lower interest rates are basically what a lot of these market gains are built off. So that's been positive for markets and obviously a week of dollars being positive. Commodities as well and oil was the big worry at the start of the year too. So as I mentioned in the update here, on the weekly chart we've had, it's kind of better when you're looking at Harami patterns, it's easier trade if the inside bar is small and the first bar is long. Now the first bar is quite long here but the second bar is also pretty long. It's basically kind of matched the first week, closed off the lower bit, but a pretty similar trading range. But nonetheless that's a Harami pattern basically shows that we've sort of stalled basically these two peaks from December and we're coming into the top of this trading range which I've just kind of used these two major peaks here. It's the final top and these two, three troughs down here to the bottom of it and we're running into the top so the closer we get into this declining trend line and then this area up here, the bigger the risk is that we eventually roll over and that could have already begun to happen down here but it doesn't seem to have been the catalyst yet. There may be, as I said, there's quite a few things going on this week, not least of which happens on Sunday where we've got the non-OPEC producer meeting talking about a possible freeze in oil production mainly with Saudi Arabia and Russia. If that kind of fizzles out and doesn't do anything that could mean there's a roll over in oil prices and stocks and oil have been pretty well linked this year and so that could be the trigger for us rolling over here. I've got this little line here which doesn't mean much on the weekly chart but say if we are looking for a breakdown of this inside bar, kind of inside bar more like a Harami pattern. Harami, by the way, just looks at the Japanese candlesticks, just look at the body, the candlesticks. So this body fits inside this body whereas when you're looking at traditional Western bar charts you're actually paying attention to the highs and lows so this obviously made a higher high so not actually an inside bar. If we got down to the daily chart, here we can see if we hold this low from Thursday, if we hold higher today, that will be a swing low with two high candles on either side. So then one trigger we can look, this is the weekly low marked by this candlestick. So I dropped through this rising trend line and this low here could be the first sign of a possible breakdown which triggers the end of this strong uptrend that we've been in since February. The Dow Jones looks pretty similar. The equivalent trend line has arguably been broken although you can kind of mess it around a bit and change it here and it's less broken. But here's the top of the trading range again and here's the peak up here which we haven't quite got to. Here's an equivalent sort of trend line here so it's just if we're looking for the market to break down what's going to tell us it's happening. You can see this trend line holding up quite well. If we go down to an hourly chart it'll be a lot more clear cut. So we're heading into a big long-term resistance area and we've got a trend line supporting us. If we break down below it, of course it could be a false break and you get knocked out of the trade but pretty favorable risk to reward if we do reverse this long trend that we've had because we've come pretty much straight up. So you'd imagine in the case of the US-30 here this was support didn't act as much resistance but a little bit. We've got a bit of a pullback here then broke the 200-day moving average and went up right up to the trend line. So you can imagine we might actually get back down to this 200-day moving average and this old support and resistance and support again but if a pivot around basically around sort of 17,000 mark-ish. So something to look out for there but obviously for the moment we're just looking at hypotheticals here. The trend is still higher but you can see here we've got a bit of a double top in the RSI and Menton's already rolled over and so potentially depending on how these different events take place this week we could be looking at a little interim top in the market. Let's switch over to UK stocks this week. Sorry, it's next. Been an incredibly tight range in the FTSE 100. Basically between the sort of 6070 and sort of 6200 to 210 is pretty well defined in the market. You know, it's plain as day to see. It's this tight range here. As of today we just hit that 200-day moving average which could be a trigger for a few people to sell. To me the bias here is probably the fact that we haven't been able to push sustainably above the 200-day this seems to me more likely to resolve to the downside but maybe not right down to retesting the lows. Maybe just down to 5900. Maybe retesting this broken declining trend line here which looks a bit better on this. I'll say it doesn't actually look better there but you can see it's basically these peaks through here that I think I've lost a bit there. Using these peaks here you can see a false break, false break but then it works again, works again. So maybe a retest of this line to then push higher. At the end of the day we're not in a very trendy environment in stocks at the moment. So if you've caught a breakout trade and just sort of riding the trend higher obviously wouldn't be the case in the FTSE at the moment. I think you've got to just be aware of the fact that it's not likely to run that far. Since we bottomed in August you can pretty much say that we've been in a choppy trading range with no real nicely defined trends. This was the best we got in terms of a downtrend but it was incredibly choppy, incredibly wavy. It took a long time. If you'd sold the break down here it would have taken a hell of a long time just to get you down here. European stocks looking distinctly weaker particularly than those in the US. Just looking at the Germany 30. Here you'll see that it's a bit of a kind of use of you almost say matching the indicator to where the price is reversed here but you will find that sometimes when you put in a low and then you push higher then you try and get through that low again. That's basically a false break down there so actually the true low is this original one. So then if you take that up to a similar thing at the top use that as the peak and then this was really just a false break at the top of the top and then we've got kind of a triple top in the end and rolled over. Then we find ourselves down at this 50% retracement mark here and just above the previous swing low for March. So basically failed to break above this 9,900 level several failed attempts and we eventually rolled over which is what I sort of suspect might happen in the 5100 where we basically haven't been able to break higher and you resolve down and then you push up a bit. Not a massive amount in terms of notable UK earnings except probably the front and center will be just on Wednesday. We've got results from Tesco's and a couple of other retailers scattered around on Wednesday and I think Thursday too. Devinum's also reporting but just like today it's going to be the miners that really kind of dictate the state of play. That obviously rests a lot on the oil and metals prices and also the banks. Banks are doing well today but they had a bit of a rough week last week kind of following suit with what's happening in Europe. The fact that the ECB in their minutes seemed to sort of apply that more rate cuts into the negative was a possibility if inflation doesn't pick up and so that's a worry for banking profits because they just can't... Obviously if interest rates are 10% and they're charging us 10% and they're paying 5%, they're making 5% if interest rates are half a percent and they're charging us 1%, that half a percent is not as good as that 5%. In very simplistic terms it's just not a great time for banks and negative interest rates makes it even harder. They're being charged while they're actually not charging us for the time being at least on our deposits. Obviously the big one last week if we switch over to currencies was the Yen. I hope some of you are in the Dolly Yen trade because we've been pointing out for a while in my last week's snapshot video I pointed back to our video from a month prior which talked when we were up at about 117.50 talking about 116 being the big level and then down from there a possibility of 105 and so from 117.50 we're down one big handle from there. We're at 108 now so let's have a look at that chart of Dolly Yen. At the end of the day if you're not on board yet there's probably some more room to go on this but realistically when you decline eight of the last nine days and you take out 900 to 1,000 pips obviously we saw worth here so if you take this as a kind of bare flag with the pole, the flag and another pole then we've got a bit more room probably down to about 106 but still they've been trained as a bit old at this point so I would say that maybe just this quite strong reversal that we had on Friday suggests that there's still a fair bit of selling momentum we haven't quite followed through on it today though obviously putting in a kind of little minor double bottom on the short term short jump chart but this is the weekly chart that we've been referring to for a while the 116 and the big breakdown level basically a head and shoulders pattern with a nicely retested trend line and obviously if you sold at the broken trend line that's just textbook and if you held it down to here and even if you hold it down to the 105 that's down to this support that literally is a textbook trade I think if we can close the week back up with 110 and then also to some extent just 111 which had been holding up the price in that consolidation that we were looking at on the daily chart then you probably don't want to be as aggressively short but for the time being the trend is well down it has a little bit further to go but you're going to have to be careful because there's going to be some short covering rallies the big fundamental point is will and if so when will the Bank of Japan intervene directly in the currency market and actually start selling yen, buying dollars and pushing this currency pair higher my sense is that there'd be unwise to do so at this point I mentioned this in the morning comment which I'll be doing this week instead of Michael Houston that I tend to think that the Bank of Japan are comfortable with the they've mentioned specifically they're comfortable with the exchange rate above 100 and I think with this kind of momentum against them at this point they would risk losing face if they intervened and it failed so they have a bigger chance of success if for example not so much you and I but big traders jump on board shortest dolly yen pair around here so if they're short down at 108 and then we get down to below 105 and then there's a big squeeze 300 pips higher there's suddenly those people short at 108 they're offside the people at 116 short from 116 they're still sitting pretty at this point and if we have the short squeeze from here from 116 even took us back up to 113 those people short at 116 they're not going to be flooding out to the market they're able to hold on they're sitting strong at a higher position so you need from the Bank of Japan sort of trading dynamic perspective if that's a word if that's a sentence is to wait for a bigger drop so you're able to squeeze those weaker hands when you do intervene you know you need the price to drop further more people to get in short at lower prices to be able to squeeze those extra people and really create a big price and even scare everyone else out of the market as well I don't think that would work at this point but you know see what happens it couldn't happen this week I mentioned the note in the first few days of this week it's not really happened today but maybe tomorrow, Wednesday if we get a big push down below 105 then they may be tempted to get drawn in just because of the speed of the descent the British pound has been the other big loser so Euro sterling being the big gainer it's dropping off quite hard today if you'd been following my chart forum posts and my Twitter posts I'm using this level and it's actually working out a tree at the moment and you can kind of see why so here was the low back in July of 2010 and then that corresponded nicely with the top of this consolidation here in September 2014 and we came up to that level and we have that kind of pivot point and we also have the 61.8% retracement of this entire decline in that same area and there's also the it's also not far above 80 the round number so we'll push them right into 80 now but this was around 81 just above there is this particular pivot level so 81.50 I believe there's if you connect I don't like it because I feel like the trends already extoller should away from here but there's a trend line down through these highs as well was it these two maybe that did also point to a resistance around this sort of 81.50 we've not got there this 61.8 has worked pretty nicely for the time being we may still get to the 81.50 for maybe the final top if these people getting short now get squeezed out of the market with another little push higher but here you can see quite a big drop down in your pound today and it's mostly sterling strength you can see the same thing happening in pound dollar maybe just as there was a bit of political risk last week Cameron was in a fair bit of trouble looks like he's going to get through the storm as of this week introducing some new plans to crack down on the wealthy using tax havens you might have a bit of a rough ride in this Wednesday's parliamentary questions but looks like he's going to be okay and probably won't dense the Brexit the sort of remain campaign too badly and the only reason I mentioned that is because politics only really matters when it's felt that it could impact where the Britain stays in the Eurozone in Europe so in the European Union so this is a good trend and if I just shift this little line up here this is some fairly clear cut resistance down at 79.30ish so look for a pullback into the area and if we do have some sort of reversal candlestick in that vicinity depending on your trading strategy whether you're waiting for a reversal candlestick or short term momentum change or whatever the case may be that could be the area to get involved if we get right down to 78.40 again near these lows at the end of March my feeling is that probably that's this rise done for the time being and we move back into a more sort of sideways choppy market but as mentioned sterling one of the big movers today up 120 pips and that's just this support level working fairly well depending on the tightness of your stop this is an example where okay you bought at two previous obvious supports if you had your stop under 140 which is the sort of round number support even better if you'd bought down or just pure the round number wouldn't have been such a solid case for doing so you can see this rising RSA trend line backed up by that pretty obvious horizontal support has worked out nicely so if you had your stop down here you'd be well into two times risk on your reward back up here and this line that I've got and just pertains back to a super long-term support over there but we're range bound at the moment I think there's probably a good chance we'll push up to 144 again but to obviously say it's been a big move higher but I suspect it does continue up to 140 just because that's the nature of the trend at the moment it's just a less it could of course it can always happen but there's just less chance of a sort of pullback trade working where you know we're here we pull down and then maybe we're back about 50% at this point so here we are perfectly at 50 pretty much let's drop the time down a bit in my experience we may get a bit of a drop from this area because it's half of that decline but what's the context? that decline is just within a trading range so that's the bottom of the range this is the top of the range up here near 144, 50, 145 so why would you sell the we're not in a downtrend where you're selling a 50% retracement expecting the downtrend to continue of course it could but it's much more likely we just pushed to the top of the range again so a lower probability trade in my mind I'll try and remember saying that for next week's webinar and see if that proved true or not so I'm mumbling on a bit this webinar so coming to the end of it we're just going to cover some commodities if there were any kind of questions then feel free to let me know and I can always expand the length of the webinar a bit crude not doing much today but you know we basically came off today's highs because you can see a fairly clear cut the August lows have worked as support three times they've worked as resistance once and they appear to be working again and to my mind not much likelihood of pushing much beyond 42 this week ahead of those Doha meetings on Sunday unless something gets leaked unless some sort of freeze is pre-announced which is possible but I suspect probably this week we're just going to get a mile drop back and all prices down to around the 40 level on Brent because there's not really much else to drive it even if we've got another big draw in weekly inventories from the US still how aggressively long would you realistically want to be before you know the result of those meetings between Saudi Arabia and Russia because that's a game changer you know if anything you know you basically use a bit of chart positioning to take an uneducated guess on what they actually end up doing in that meeting you know you can go short right in this kind of vicinity just with the hope that they don't agree on anything and all prices drop again on the idea of oversupply or you could wait for a pullback back down to maybe 38 or so if we can get that load this week on the hope that actually they do agree something and so you're selling resistance or buying a support before a fundamental event that maybe works out your way or maybe it doesn't but if to be buying up here you're obviously buying right before major resistance which is generally not a great idea we do have too much time but I did want to kind of touch on silver and copper which I don't normally do so gold is up big today let's just quickly look at it it's basically running your right into 1250 at the moment finding some resistance from 1250 we had a big reversal from 1250 on the 24th and Feb seems to be kind of in that reversing from that same area at the moment struggling to get through it above that we've got this quite big reversal from 11th to Feb that 11th Feb top in gold wasn't quite the top we had a few false breaks above it that matches the bottom in most global equities so gold trying to push below push part beyond that sort of risk-off peak which goes a bit counter to most of the equity markets being well away from it their respective equivalent lows so even if we peak here or if we do manage to push up to 1260 still a bit of a risk of a very choppy looking head and shoulders pattern that could eventually break with about 1200ish being the or maybe 1210 being the neckline bit choppy really to really call that at this point silver was a bit more interesting just because I've scrolled out my daily chart a fair bit here because we have this trend line where we had a false break went all the way down and successfully tested the 200-day moving average got a false break through it held it, didn't go as low as the previous low down here and we pushed right back up to this trend line again so don't get too distracted by the trend line but the trend line seems to be working where it's pausing where we are at the moment the 200-day moving average as well and holding above that previous low bit of evidence suggests some underlying strength in silver but still the caveat is that we're in a range bound market with about 1480 I would say that low that we just put in is the bottom of the range and it's 1595 to 16 being the top of the range so really to be very confident that it's breaking out to an uptrend you don't want a nice solid close above 16 but obviously that's a lot later in the game than we are at the moment this would be much better entry price down here if we can get a close above the trend line it's just not as certain of a directional move equally in copper we also had a kind of downsloping trend line which was pretty well defined and we've dropped right down to retest it here and it's also the 61.8% retracement of that pickup of the lows so not a huge reaction on the first test doesn't bode well nonetheless we've got these lows down here so maybe a confluence of Fibonacci previous lows and broken trend line support could be enough to trigger a rebound in the price of copper maybe Hibiki and I in the RSI we're pretty oversold if we can come out of the oversold territory maybe a bit of confirmation of those technical support levels okay that's it for this week's analysis this week's webinar much appreciated the signing in I hope that was helpful and good luck with trading this week and see you in the same time next week thanks very much just a lot of signing out