 Okay, very good morning Wednesday 29th of January. I hope everyone is doing well So as you can see regular start now to my briefings the Coronavirus live monitor update Which I'll get into shortly, but you can already see there in the top corner of that screen the total confirmed cases now Just a touch above 6,000 Total deaths now at a hundred and thirty-two to excuse me if I can speak properly 132 and as you can see that Hubei where the capital city in that province being Wuhan is the still the epicenter of the outbreak in China where still the predominant virus has spread and Relative containment within that geographic region for the moment. So a couple things from overnight you did have Hong Kong returning to markets. They've obviously been closed for the Lunar New Year holiday. Remember, there is a bit of a difference between When Hong Kong markets open in the mainland so Hong Kong catching up really I would I wouldn't over interpret the fact that the Hang Seng fell 2.8% Overnight that's a sizable move, but that's because it's had to play As I said catch up from some of the movement in which we've had Earlier in the week and since the weekend And let's not forget the the more localised indices have been impacted more severely than they have here in the western world In regard to the mainland Europe the uk and the us China remains closed. Remember, they've had an extension to their Lunar New Year holidays So not looking till next week until things get back to normal business there But again that's like to monitor whether or not they'll move that Obviously the longer they remain on on lockdown or shut down in terms of their whole economy and the movement of people and Ability to be able to work and and obviously from the manufacturing activity points of view Which has already been relatively depressed albeit stabilized over the period of the last few months The longer the shutdown the more severe the economic implication could be as a knock-on effect So they definitely would want to to get things back to normal at some point soon Quick look at the charts though and and a quick a few points to discuss really For one Wall Street. I mean the Dow finished up last night 187 points If we look at the s&p and I'm going to look at three different charts here because I was in conversation with a couple of the guys yesterday About correlations, which also want to I want to mention here and these charts remain unaltered as to some of the Just general support resistance trend lines and also the ellipses which were sort of targets that we were looking at at the time and so It's not rocket science when it comes to where you think or anticipate that price movement could react to Again, the the baseline core then is your your fundamental view on whether or not you think that This coronavirus is It's kind of as far as the markets of perceiving it is controllable at least at the moment And this is my first point. I wanted to make You know, I've seen a lot of people On twitter or just generally asking me questions Saying about, you know, what was the origination and it's china. They're they they're creating these biochemically engineered kind of weapons such as viruses The death toll is way higher. It's much worse than what they're saying Quite frankly, I don't care about that. It's not important. I mean I mean I say that in the sense that yes It is important in terms of we're tracking it But you know, where it how it started where it came from is kind of, you know, yesterday's information What I'm trying to judge in my job And to help you guys in a way to see it is what is it that markets expect And at this point the fact that the total confirmed cases are at 6,000 I think 6,000 is pretty low comparative to where markets Perhaps were fearing only two days ago So at the moment unless this is to escalate and 6,000 turns to 60,000 within the next coming days I I don't really see this as being a major threat To western financial markets at this point in time. I think yesterday was a large reflection of that Yes, if you look at this graphic the rise of cases is almost exponential, but Don't forget if everyone is expecting exponential rise or then unless it's Absolutely spectacular in terms of how quickly The virus is evolving and spreading well, then this is within our expectation And so therefore it's in the mind of the investor. It's a contained situation Not contained as in the virus developing if that makes sense So that's that's the first point the second point then here is Looking at these charts from a more technical standpoint Obviously, you had the gap down in price from the chronovirus gap on the recommencement of trade over the weekend Monday was the day which the s&p saw its biggest down day in almost six months And so that was that low point which we defined and we've now Printed down at kind of the 32 33 level in the s&p However, since that point yesterday when we were talking the briefing We were kind of hovering around this area here and then it was a case of looking at the kind of range highs and then Then a potential gap fill and you can see when we did actually yesterday in the afternoon start to break The top end of that that range we had been trading Then you know, it's kind of You know clear traffic then to just try and close up the gap and that's pretty much to the tick You can see the way the the market responded from that period of around three to five pm yesterday As soon as you hit your objective, which was that that initial low that we had on friday The market then backed off We kind of consolidated around that point only then to break higher again in asia pacific session and now What was pretty decent? Resistance here now turns to pretty strong support. So as you can see from these levels So Yeah from here, I would say I feel fairly Confident now that the market might well contain a range or In this kind of fashion if not start to push higher if it is the case then that This chronovirus although the numbers will will continue to accumulate if it continues in the fashion that it is at the moment I think the markets will take that in its stride Is the point I'm making now from a third point was the correlations now That's just looking at the s&p and one of the things I was talking about yesterday was about the judgment of sentiment And obviously yesterday in the briefing we're talking a lot about you know Trying to pick up on the nuances of what the general media is talking about you remember everyone was kind of brushing aside Um the severity of it talking about the historical precedents All those big banks like jp and gs talking about the phenomenal recovery markets tend to see and so That's one part the other part then for the sentiment is You know, where is these other assets trading and the clearest barometer of risk often is things like gold and t-notes Has a nice kind of measurement of people's risk appetite And yesterday there were two kind of key periods of market movement one was here Which was as you can see Was the gap up that we had so this is the inverse mirror Reversal if you like of the s&p So as the s&p fell and gapped down at the opening of trade sunday night gold gapped up But then when we broke yesterday around midday The previous low and the highs we had on friday You can see that extension that snap lower that we had came back up to that point and then the push down And so when I was talking to some of the guys yesterday I mean as I said that these these x's here are completely unaltered obviously this price action didn't exist And so you can just see though how the planning that we were talking through did actually work Absolutely Market broke came back up to the level came all the way back down hit that target down at the s2 Which was some of the low of the period of that consolidation we had on the evening of the 24th You then had the target of the high on the 21st and 23rd We broke that hit our second x that being then the point of which Was bringing in some of the previous highs in the 21st and the 23rd and down here on that 24th And then that would have been the final exit on that trade so Again, it's you know marking out these levels You know and monitoring then the trigger points And one of the things I was saying to the guys yesterday because you know T-notes here on the bottom right the final chart I'll kind of show you Is the same sort of setup obviously if we're looking for an equity recovery and we're looking at gold trading heavy Well and to fit that narrative we'd want to be seeing t-notes continue to grind lower So at the point then we were looking at these entry points At around that pivot level down towards the the s1 and the lower bound of the price activity And you can see really if I put a horizontal line how the market Came down to that target of that initial low after the gap up we had on sunday And as per that x there we did get grind down Didn't quite get down to the point of where the friday high was before then Similar like like gold before we then have had a bit of a bounce this morning um Ideally what you're looking out for in the intraday kind of environment is Generally monitoring, let's say just looking at gold the s&p in the 10-year I think between those three then is technically looking at where there are any Relevant key levels that could act as a trigger point almost then for that Then being a catalyst for a domino effect where the trade might not be the first direct one But the subsequent move in a different asset thereafter And that's where again you're trying to Make your judgment of timing of execution But also as well your judgment about your conviction on the type of sentiment that you're seeing in the market And that's where the correlations can be particularly useful in that regard so I'll leave the technical setup and stuff to sam in a moment, but I just thought I'd cover off those those few points One thing though that I thought was quite interesting from a headline This came out of the south china morning post this morning and it was talking about you remember And this is another great example about How Human behavior is such a A key component of being able to trade the intraday and and pick up on the The nuances of the change in sentiment and the narrative of the stories On the kind of hierarchy of the news that's moving markets If you remember about before crono virus came along Everyone was talking about u.s. china trade war Of which you've pretty much heard nothing about And then from a public national interest point of view. It's like megan mackle and harry never existed After I couldn't get away from it Being exposed to news as a job now no one's no one's bothered why because there's a new story in town That's much more important that could infect all humans across the entire global Across the planet and so that's the new sexy story in town So it gets all the airplay and news channels will be you know directly looking at that So although there's a disconnect between normal tv For the man on the street market participants need to take into account then how market prices reflect this new This new kind of norm is is the point An interesting thing though going back to the u.s. china trade talks was this Chinese press reporting that crono virus Originating in wuhan has sent agriculture commodity prices tumbling And obviously it's led to the shutdown of factories and markets in mainland china for a longer period than was initially Anticipated many analysts are now starting to become increasingly skeptical about china's ability to buy The 200 billion dollars of u.s. goods in the next two years You know remember china's signed up to that phase one deal Where they've got to buy an incredible amount 200 billion worth of us goods over the next two years They're now committed to that as part of that agreement But you know how how are they able to do that when you know, they're currently all efforts are focused and concentrated on just containing this This latest outbreak So ultimately my initial take on this is I don't think that that's too much of an issue I don't think that the us is really going to press home the point on I think there would be some wiggle room on any commitments on the timings of this So if anything once crono virus if it does indeed settle like some of those banks were Backtesting with their data and in the coming weeks if this is all a distant memory An equity market start moving back to all-time highs again Actually, I think this could be a a fairly positive Development in a rather perverse way because it means then that the market Isn't going to be so sensitive to the implementation of phase one Because china might well be given a little bit of additional leeway on behalf of the us Which means less likelihood of direct confrontation about what was very feared Was the implementation of phase one and china's inability to be compliant with that And so if anything then if you remove some of that tension that perhaps could have come over the coming months As china gets its feet back on the ground and if the us allow them to be able to do that That does then downplay the severity perhaps of another flare-up in the us china trade war So in a way, perhaps this could be a positive If we move beyond the crono virus in the coming weeks All right moving off that a few other things i want to mention Obviously, it's the f mc. Don't forget. We're going to be covering that live tonight on the youtube channel So if you don't then please subscribe join us at 6 30 lb time so 12 30 if you're in chicago And i'll give you a full preview for 20 minutes before the actual announcement comes And then we'll have a listen in on geron pound the press conference Just a very brief overview because i'm going to go over this in more detail later This is where interest rates reside at the moment in the in the us and obviously we've had that mid-cycle adjustment executed the three rate cuts of 2019 And as far as markets are concerned from a rate perspective For today, it's pretty much unanimous markets are priced for an 87.3 probability of a hold in rates and in fact, you know, you might have thought well This explosion of crono virus might meant that the economies globally are going to suffer and the fed are going to have to cut rates Well, actually markets are priced if anything for a rate hike Not a rate cut It just goes to show at the moment that a lot of this isn't really phasing the rates market in terms of This this latest outbreak and what markets are more concerned about are things like the passage of the phase one trade deal And the implications that has then for Stabilization and continued ongoing growth in the u.s economy A few things that we will be watching on a very top level This is the balance sheet of the fed And if you remember the balance sheet exploded through the advent and execution of quantitative easing through the financial crisis Up to around four and a half trillion dollars from 800 billion It they then performed what is kind of more formally known as quantitative tightening Um, however, they ended the fed's balance sheet normalization If you remember during 2019 because that was when markets were seeing some sensitivity to this kind of unwinding of qe with the subsequent rate hikes that were happening at the time We had the escalation in the trade war and economy was somewhat stumbling. So they put that on ice Then you had the repo rate liquidity squeeze Meaning the short-term funding requirements in the u.s to keep the kind of system ticking over meant that they've had to start buying treasury bills at a pace of 60 billion dollars Which again is up for debate and whether or not it's not being officially termed as qe But as you can see the fed's balance sheet severely increased over a very short period of time as they try to offset any short-term issues in in the funding market and so This is going to be one of the close things that people are looking at The fed will not want to make the market It's kind of in is one of those again where the fed doesn't want to get the market comfortable with the notion that they're going to be there to support the economy forever And and they want to not spook the market when they do start Tampering down these t-bill purchases that they've been doing which at the moment They said they'll continue to at least the second quarter of this year And so perhaps then investors will look at the press conference tonight as so many indications about how they Want to go about managing that process over the coming months. Remember forward guidance Is exactly that the fed if they are going to stop this active 60 billion purchase They want to be communicating this type of thing months in advance as not to spook markets Just having a look at a few other things statement changes Probably going to be minimal The committee is likely to repeat language from december that growth has been moderate with business Spending sluggish inflating inflation remaining below two percent I don't actually think the statement is going to be that interesting at all And then otherwise the balance of risks That's kind of one of the key areas and phrasing that people look for And this really is coming from the press conference pow is likely to repeat that the u.s The u.s economy is likely to repeat that the monetary policy is in a good place and it would take a material change in the outlook To cause a move So if you think about it from a federal reserve point of view As I said the success of going through phase one of the trade deal does mean That for the moment the biggest single threat at least for now chronovirus of course to be monitored Has been executed and therefore there's no real need for them to change anything just as yet Whether one way or the other he's probably going to be questioned drone pow on The trade deal, but also chronovirus, but if you're looking for any type of clarity on chronovirus from pow I think you're going to be disappointed details Obviously are vague Quantifying its impact is incredibly difficult and will only be inaccurate And so drone pow is likely to not really say anything on the issue He's obviously going to pay heed that they'll monitor it. But what can he say? He can't really say anything So I would definitely not be looking for that to be a cue for an actionable trade over the Fed later on Final things for me to mention apple They had their results last night one of the biggest corporate earnings, of course We've got some other big names I'll show you in a second reporting today that you need to monitor if you're looking at the index futures Apple shares actually rose After market last night they reported holiday quarter revenues that exceeded market expectations Pretty firm rebound in iphone demand and surging sales of their wearable devices, particularly the air pods This obviously from a top level very important for apple's long-term strategy The refresh rate of phones given the average selling price now is much higher Meaning that contract terms generally which a few years ago would have been yearly and are now more close to three years And so a dependency then on on service applications And wearables is it is particularly key to their longevity for continued growth going forward They've managed to do that successfully The launch of their streaming tv apple kind of plus if you like has been I guess a lukewarm response They've had competition at the same time from disney and obviously it's a fairly competitive space dominated by the likes of netflix so overall fairly positive And it'd be interesting to see how they perform when we get underway later on But they're the first of other big tech giants which will be coming out Today so pre-market Before we get to microsoft and facebook though you've got bowing Bowing I think are about seven and a half percent of the dow at the moment So biggest company in the dow Jones index. So bowing will be coming out. I'll get you the set time When I have it, but normally they will be 12 half 12 london time You've also got general electric at and t mcdonald's From some of the bigger names then aftermarket microsoft facebook and then from I guess you can kind of put them in with the fang type names In terms of it being highly sensitive I mean tesla tesla. I saw some stats this morning their valuation Is bigger than ford and general motors combined. It's now bigger than volkswagen Even though they sell a fraction of the same amount of cars, obviously Um, so it's always quite interesting to see they they typically see large swings on their their corporate earnings On a quarter to quarter basis So do be aware of those earnings reports calendar wise. What have we got today? Well, there's a couple of different things For this morning. It is pretty quiet. There's not a great deal to monitor But as we get into the afternoon, we've got the trade balance number coming out at 130 Um, and we've got pending home sales At three o'clock. You've got the weekly infantry's Coming out at 330 and with that in mind, let's just have a quick look at the Apis from last night. So we're all up to speed The best place to get the apis from a top level Summary is actually zero hedge because they have like a regular way of which they represent the data Which is probably the neatest way to look at it. You just need to grow Scroll back a couple of stories and you're about to find it. So just bear with me for 30 seconds and let me find it. Here you go So these were the numbers last night make it a bit bigger So you've had a crude drawdown of 4.27 million expectations were for a slight build of 500 000 The cushing number Was a build of 1 million expectations were for a drawdown of just shy of that gasoline a build of 3.27 million distillates a drawdown of 141 000 If you actually look at the crude chart from last night Let me just quickly transition my screens and show you So when the data came out, I mean this the the crude market obviously somewhat Replicating the s&p in a sense that as the dust settles on the Shake out at the beginning of the week from the chronovirus that fear about the impact on demand for crude oil products Starts to dissipate with that renewed kind of sentiment being more positive And so you can see here again You target the gap fill on the break of the range And then the data actually that came out last night was this candlestick here You can see then initially was a positive we came back, but we kind of clawed up higher So yeah the infantry levels to be monitored They obviously provide intraday short-term swing in price But I would be looking for too much unless completely outlying. There's a lot of other things going on at the moment globally But the headline draw was 4.27 million Other than that the Fed obviously the highlight of the evening. However I do think that from a trader's point of view what's going to be way more interesting is the Bank of England tomorrow Because it's going to be a bit of a knife edge On the vote and the split is likely to be mixed on whether they will hold or cut I think the Bank of England will be much more interesting than the Fed However, we will be covering that of course in full All right, that's it from my side. Let me hand you over to Sam and I wish you guys a good day. Thanks very much Yeah, hi guys. Good morning. It's getting the the s&p into picture here and Let me just remove a couple of these these lines And uh, yeah yesterday's trade certainly passed the cash open initial blip blower to to come higher A couple of those resistance levels were filled and you can see in early trade today The gap was closed inevitable perhaps I know there's a few people certainly in The second stage of the program that traded that fantastically It was almost like free money watching that go higher and higher a couple of times it did pull back And that was just the opportunity to get it again. What happens now will be key 32 90 and a half is your level to the upside and just keep a watch on that Above there. It's almost like well Monday Tuesday. They didn't happen And therefore that makes the s&p not too far away from the all-time high again Which would be just remarkable to say that after everything that's gone on in 2020 so far You're less than one and a half percent away However, this is a key resistance level and there are plenty of Support points below that if they go things can start to get ugly and you know if we We hold that 3280 level To the downside and you can see we kind of tested it already. So I'd mark that up It is also the friday low as well got messy to be fair. Yes, they even after that first test But I still have it on just a bit below where we're trading horizontally Anyway, 32 72 and a half another point where I'd be looking at if we get a couple of Trend lines, as you know, I can't live without those. It's get those on to drive Through yesterday on the cash open bit of support in that area Around yesterday. I'd have that on as a potential for some support in the mix If we were to come lower And then you know, you are looking at any of these previous highs that could also act as the same thing If we look above where we're trading Again, you've got to quite a lot of these horizontal support points to to keep an eye on I know a few people will will look to get the fibs from the bottom to the top and the top to The bottom vice versa to look for potential areas and and so so bit. Um, I would just Now I've got this on the 15 minute I I'd have your areas marked up like this and I just leave it just leave it until price comes to those points There's no real need to get involved in the mix between 30 to 90 and 80 in that 10-point range Wait for those levels to come in make a decision when it's there fine Does the risk ward make sense and so on But early hours 8 37 is much really going to happen now. Probably not Probably not. Let's have a quick look over at that euro, which on the weekly trend line yesterday we were talking about It's tested it and it's tested it and and went went below early hours again this morning Just bring that in there to keep a watch on that. We've got the fed tonight Do we confirm the week below there because if we do well, what's stopping it going down to that low that we had last year And then, you know, I'm just going to move this out the way the camera low 2017 Where's that markup with not far away as well from there, which would be a multi-year trend line three years in play that goes We'll allow further euro But fed today or this evening, I should say UK time and of course anything can happen there If we just get those trend channels on and we will of course be live on youtube later going through Some of these levels longer term and you know trying to necessarily predict what's going to happen On these points is is not always the the easiest thing but just putting this on the the weekly rough sort of Trend channel on there. You can see that's a bit of a guide you would look to have So in the quieter period today, would you want to get too heavily involved in the euro probably not You can see that trend line here. It's is rough But on that week you'd expect that you can see it still acts as resistance once we have broken through So have that on as a bit of a guide to to price if we do get up there That's a you know a very important line in the sand yesterday's low See about an area where price could be Drifting towards now that s1 getting a bit choppy The previous lows of the day Around one ten forty three got some nice price action there was monday's low We broke through it yesterday to find resistance before eventually breaking through So that's an area to keep an eye on but other really than okay the pivot that point The lows of yesterday in that trend line I'd I'd be awaiting see her for the euro not looking to get too much involved in the dollar before this evening Certainly one of those days where if if it's going slow, there's no need to go chasing the pound We're bringing that that trend line on the on the daily another Session where we were drawn towards it. Let's just get that in and It doesn't want to break yet It does not want to break yet and and make no make no mistake about it They would have been people without a short once that trend line broke inverted commas yesterday and are now worried a bit Remember, it's all about that daily close certainly on this level because just on those lows you can see the importance horizontally of this point from the beginning Was that the end of october 31st october? Interesting day that or wasn't to be uh, then November and then as of course this year as well. So can we get the close below that trend line possibly today? But then of course you've got the uh super fursday bank of england It'll be really interesting where we close the week really interesting and and I think You know put my I don't even think it's necessarily putting your neck out there I've closed below the week there and and we drift lower because you're going to have you know reasons that the Bank of england's Were more dovish than expected and I think we we can get 128 31 by the end of next week If they're if we close above that trend line most likely they've been hawkish and I don't see much stopping a 132 it's a wait and see for the pound As simple as that whether you want to get involved too much in the morning now No, it's up to you But there's a nice resistance point around 130 60 good price action there And of course that trend line keeper watch on that. We are starting to get these lows Does it mark up as a trend line? Yeah, it does. Look at that. Lovely one two three people watch on that as well Oil putting this on the longer term chart. Have we found the bottom? Have we found the bottom? What do people think uh for oil? Let me know in training live and youtube Drawing this horizontally on those lows I think people would have perhaps expected a bit more to to come down and be attracted to this area between sort of 51 bucks and The low that we made I don't necessarily think we're we're out the woods just yet Let's have a quick look at some potential levels intraday that are important You know if we bring in those pivot points again, which I like having on get a trend line on from those lows and just For later on perhaps Just looking at these levels for where price could Eventually hold up the gap has been filled in early trade just like the s&p So the next kind of points to keep aware of will be any of these previous lows or highs as an area of resistance Whether oil has found that low or not Remains to be seen but certainly 51 to 52 is a very important point On the futures market There are one the high from Friday evening looks to be like a decent enough resistance level 55 16 would be an ideal place I'd like to to get in just on that breakdown that we had back on the 24th As well quick look over gold to to wrap it before looking at the the dax gold drifted down yesterday broke through the Level support there's a couple people that took the short on here and this is a really good lesson I'm going to go through quickly you get gold pushing lower breaks the low of the day breaks Mondays area support the gap And it's about now. Where do you get in for the retest? You got the s1 Which would attract people but where did this move really start and you can argue It's a break of these areas of support here where the the selling pressure keeps on so if I'm going to short s1 I want my stock above there Which would probably you know to be too big and rightly so so for me if s1 worked fine I don't want it, you know missed that opportunity But my risk of water is intact next area you're looking at is the low from Monday or even from What would have been today yesterday? But then the stock probably again is a bit too big and you can see what happens It comes to s1 and you know go straight through gets a bit choppy But it's not really until it comes to those levels there and just putting this on that Five minutes. I've got that area wrong here. You can see where that selling comes over price comes back and and You know both s1 yesterday's low the day before that's low don't work And and that's when you get that real push from so it's a good lesson Just keeping an eye where did that selling start from why can't that happen again and gold since then has pushed lower So and that level comes on the r1 today's keeper a watch on that pivot looks pretty key below where we're trading You mean you can see why today's lows. I mean this is just what I just said the other way around Where did the buying start on the 24th once you broke these areas of support big push through comes back and finds A level support there as well. So you got three big levels for me for gold 1583.3 1576.8 And 1568.2 a couple trend lines on those lows as well probably to have marked up and where does that third test come in You guessed it today's low to have a look at the Dax as quickly now gone through that open 45 minutes up down in the middle Undecided on it on where it wants to go what it wants to do Choppy on the 60 minute That gap hasn't been filled if us stocks decide to run away at any point people watch on on this would be My advice. Hope you all have a good trading day Catch us on youtube later and I look forward to catching up with all of you later