 Hello and welcome to the Monday market update with me Dave Madden. Today's date is Monday the 26th of November 2018 and the time has just gone 945 gnt We've had a fairly positive start to the Europe European session this morning Stocks in Asia largely finished higher overnight and the certainly higher in Europe this morning And there's a few factors playing it to the positive mix this morning Largely the Italian government are the sources saying that the Italian government are showing a bit of flexibility In relation to the size of the budget deficit the planning and money next year very recently the Italian government were very very much fixated very much Focused on running a budget deficit of 2.4 percent increasing budget Increasing public spending as a way of boosting the economy and that has actually gotten them into a bit of trouble with the EU But now it seems that the lease seemed to be a bit of flexibility around the 2.4 percent deficit And now that they're sort of saying that they're not necessarily fixated on the 2.4 percent level So this so they could look around running a potentially a smaller budget deficit than planned and that can actually kind of That could prevent them from getting actually just this this Disappearance action from the European Union Which and which that has helped Italian club of bounds and in turn it has also helped the Italian stock market also the wider you result stock market to There's also been a fairly decent Rebound in the oil market oil at a major yet again had a major sell-off on Friday losing over 7% But we have seen a bit of a bounce back in the oil market this morning And that not has only that has not only just actually helped oil stocks on oil related companies It's also just kind of lifted the sentiment because a weak oil price is Some some some quarters represents perceived weakness for demand So bounce back in all as you can if it gives more of a positive message that the global economy is actually maybe get a higher Demand for oil that is something that has had originally priced in at the back end at the back end of this week We will have the G summer 20 meeting and everyone's going to be watching the the meeting between the meetings between China and the US and Any some traders are optimistic that we could see some progress Being made at that meeting Even if you're not sure of any progress we could see a kind of a beginning of a potential improvement in the relationship between the two sides Over the weekend we heard from the EU summit and essentially the European Union of agreed and agreed amongst themselves On the deal that batteries may agree to them during during the last week and essentially the EU are effectively saying this is the deal Trace may you either accept it or that's it. It's very much There's no more tweaks to it This is going to be the deal if you had any deal whatsoever So Trace may is going to have a very difficult few weeks to actually kind of sell that deal To to our party and also jobs you potentially members of the opposition as well So that's going to be of course going to be in play over the next couple of weeks Take a look now at some of the major markets starting off with the FTSE 100 I'll take a look at the FTSE on a weekly chart for a very good reason I want to discuss this red line here the 200 week moving average I guess it's kind of seen as kind of a very decent Barometer whether our markets pop markets in a in a strong shape or negative shape And if you take a look at the 200 week moving average in the last few weeks We see that we did manage to drop below it and then we push back above it for a couple of weeks And we've been kind of dancing around at the last couple of the last couple of couple of weeks So if we hold above the 200 week moving average, that would be a positive sign And it could suggest we might see better gains We could look at retesting the October high or perhaps we could even actually look at that Any back down to these levels here in September at seven thousand two hundred and twenty But before back below the 200 week moving average, which comes to the play at six thousand nine hundred and sixty six If you manage to fall back below that It could be likely to have you back down towards the lows of March, which comes into play at six thousand eight hundred and thirty nine We're talking about the 200 week moving average on the DAX on the German market now in a second I'm discussing a bit of doubt theory And once again, I'll start off by looking at the weekly chart The 200 week moving average here, the red line here Which comes to the play at eleven thousand five hundred and ten And we can notice here that the DAX is back below its 200 week moving average And in the last few weeks, probably set more time than not, below its 200 week moving average So quite a negative sign coming out of the DAX And while we remain below the 200 week moving average, it's likely we could see further losses on the DAX And should that be the case, we could be like heading back down towards eleven thousand And if you go below eleven thousand, we could see potentially further losses from there Now, one of the tenets of that theory is that all the averages must confirm each other So we can see here that the DAX is below its 200 week moving average Whereas the foot 200 is kind of dancing around its 200 week moving average Now, if both markets are below the 200 week moving average, we can be more confident That both markets are going to continue to push lower If both markets are above the 200 week moving average, we can be more confident That the wider market is going to push higher But if one's above and one's below it, that's a bit of a decision So that's why I think it is important to, if you're trading one market, it's important to keep an eye on what the other one is doing Because usually speaking, major equity indices tend to actually kind of move in line with each other And if they don't do that, that's what is often a bit of a decision But when they all move in the same direction at the same time, you can be more confident that the wider move is going to continue So if you see, well the DAX remains below its 200 week moving average And should we see the foot 600 fall below its 200 week moving average, we can become more confident that DAX is going to lose ground If they do see a push higher in the DAX and manage it to reclaim its 200 week moving average We could see resistance coming to play at this area here at 11,692 And if we go beyond that, our resistance could come to play at 12,000 And it's a big psychological number, but also if you draw a line, if you draw a resistance line from the highs of June to the highs of July And also the highs of September, we get this trend line here And if you do the DAX work, you're going to push that higher from here Should we see trend line support, it could come into play in, sorry, trend line resistance rather It could come into play in around the kind of 12,000 mark Take a look now, what's going on over in the US on the S&P 500 So if you take a look on a daily chart, if you draw a trend line which connects the lows on February 2016 With the lows on November 2016, we get this trend line here And we can see here that this trend line was respected back in late October And the market did manage to bounce nicely off of it, but the market has managed to turn over on itself yet again As we can see, it's actually still holding above of this trend line support here So the more times it kind of touches this trend line and it kind of bounces off it and remains above it The more confident we can be that the market is going to hold above that trend line Now, if you manage to hold above this trend line here, we could keep retesting in 2700 If you go beyond that, we could be looking at retesting the 200 day moving average This red line here at 2762 If you go beyond that, we could be looking at testing the early November high Which coincides with the 100 day moving average, this yellow line here Which comes to play at 2821 But if you do see the market drop along this trend line here We might see support coming to play at 2600 And if you go below that, if you do have a slice of the sell-off below 2600 We could be looking at heading back down towards the February lows back here at 2532 And speaking of Dow Theory, we're now looking at the Dow Jones I'm going to talk about the trend line support and once again, how the market, the averages must confirm each other But on the Dow Jones, if we draw a trend line between the lows of February, March, April and May We get this trend line along here Now, to be fair, the market did trade below it back in late October But it did manage to hold close above the trend line And in the following session, the market quickly moved up off the trend line But lo and behold, the market has turned over in itself Dropped back below the trend line And we now appear to be trying to reclaim the trend line yet again So, like we're seeing with the Dow Theory and the DAX And the plus 300 in relation to the two and a weak moving average If the SP500 can hold above its trend line support from the lows of February 2016 And if the Dow Jones can hold above its recent trend line support We can be more confident that the book markets aren't going to push on higher Alternatively, if both markets fall back below Their expected trend line supports We can be more confident that both markets are going to move lower But once above its trend line support and the lowest trend line support That's where the indecision comes from And you can be a bit less confident in the potential to move ahead of us So, it's often a good idea to keep an eye on what the other market is doing If you're trading one particular index So, if you do manage to move back above the trend line support We could be looking at hitting up towards 25,000 If you go beyond 25,000 We could be looking at attracting 26,000 The next big psychological number And then beyond that, we could be retesting The early November high of 26,278 Should we drop back below this trend line support And give a size of break below if you could be heading back down towards 24,000 And if you go below that And heading back down towards one of the lows in early May at 23,539 Take a look now at what's going on at the oil markets Like I said, we had a fairly deep rebound at the oil markets this morning But oil has had a terrible time in the last six or seven weeks Since the highs in October Brent crude has dropped, well, Brent crude has lost about 30% Whereas WTI has lost over 30% In that fairly short time period So we can see it's a very strong aggressive move in the downside Classic example of a downward trend Lower lows and lower highs But if you can hold above Friday's low We could see a bit of a rebound in WTI And if you do manage to get a push up higher from here We could be looking at heading back up towards this area here At 67,050 And if you go beyond that We could be looking towards $69 a barrel And then if you go beyond that We could be looking at heading towards $70 a barrel But we would need to actually kind of retake The total to be a 200-day moving average At 74,060 To be more confident that the recent downward trend has come to an end Because for the last six or seven weeks It's been an aggressive downward trend And selling the valleys has been a very popular strategy For some traders If the market does manage to turn over the south yet again And if you take out the recent lows We could be looking at heading back down towards this level here At 56,73 And if you go below that We could be looking at heading back down towards $55 a barrel Take a look now at what's going on in WTI Similar looking chart here Had a very aggressive sell off since early October Classic example of a downward trend Lower lows and lower highs If you do manage to You can see here that in around the kind of $50 area That the market did manage to find some support from there So if you could hold about 50 bucks per barrel on WTI We could look at pressing on higher And if that is the case We could be looking at heading towards this area here At 52,53 And if you go beyond that We could look to head up back up towards $55 per barrel But if you know The market is well below its 200-day moving average Which comes to play at 67, about 19 So while we hold below that metric It's likely we could see further losses on WTI And if the market does manage to turn over itself And if you do trade below $50 a barrel We could be looking at heading back down towards this area here In at $48 per barrel Take a look now at a couple of currency pairs Starting off with the Eurodollar So the wider picture is that We have a pretty aggressive sell-off between April and August And then we saw a bounce back between mid-August and mid-September Or mid-September But since then we've had a continuation of the wider downward trend And we've seen the market push lower in the last number of weeks And ultimately while Eurodollar remains below the kind of 115-10 area This level here It's likely we could see further moves to the downside of the currency pair So if we push that lower from here We could look to test the mid-November low at 1 spot 12-16 And if you go below that We could be looking at heading back down towards 1 spot 11-10 And the rallies might run into resistance in at 1 spot 15 1 spot 15-10 And they should be going beyond that We could be looking at heading up back up towards the 117 Sorry, kind of the 118-15 region here Which is the late September high Take a look now at now on the pound versus the US dollar So similar situation here for the dollar With the pound also on the ground to the dollar Between April and August Had staged a bit of a rally that would come back mid-August to late September But ever since then we have been kind of largely being pushing into the downside The economic indicators out of the UK by and large have been good It's just uncertainty surrounding Brexit I've been really holding the currency pair back And until we hear some kind of concrete news One way or the other If it looks likely that the Theresa Mays deal is going to be accepted Traders would appreciate the certainty And we couldn't potentially see money as you go back into sterning Because like I was saying The uncertainty surrounding Brexit has been really hanging over the British pound But on the other side of the coin If it looks like we are heading for a no-deal scenario in relation to Brexit That could put major pressure on the pound And we could look at rather pushing Taking off the most recent low So take a look at the price action here While we remain below the 130 mark on cable sterling dollar We could look at actually going to continue to push on lower And should we push on lower from here We could be retesting the April lows in that one spot 2661 And if you go below that We could be looking at heading back down towards this area here A level not seen since June 2017 Which comes to play at one spot 2590 Any moves to the upside like I said Might run into resistance at 130 And if you go beyond 130 We could be looking at heading up towards The early November high at 131 Sorry, one spot 3174 What I'm not going to do is take a quick look at the week ahead The week ahead can be found on our website If you go to cmcmarkers.com And under news analysis You will find some of the updates that we did Get posted to news and analysis I'll talk about the insights on our trading platform in one moment time So I'm taking a look at the week ahead So looking ahead to the middle of the week We have UK bank stress tests So basically the back of England is essentially going to actually Kind of run stress tests You can have the balance sheet strength of the major British banks Loads, Barclays, HSBC, Barclays and so on So those results are going to be out during the week On Wednesday over in the U.S. We have Dix sporting goods stores Sporting goods, third quarter numbers coming out On Wednesday and Thursday from the U.S. We have third quarter GDP figures And also the minutes from the latest Fed meeting On Friday we have the G Summit Summit 20 in Buenos Aires Like I was saying at the top of the video Most focus is going to be on the meetings Between the U.S. and China over in relation to trade On Thursday we have full year figures out from Thomas Cook On Thursday we also have U.S. inflation, income and spending That's going to be important to watch Because traders are quite fearful that the U.S. At the U.S. central bank are going to press ahead With a fairly aggressive monetary tightening policy But all the traders are less convinced that the Fed Are going to continue on raising rates At a fairly fast rate into 2019 So these figures here could provide us with a clue As to what kind of pace in which the Fed Are going to look to hike rates in 2019 And on Thursday we have third quarter figures From Abercrombie and Fitch, the U.S. retailer Over in the United States That being said, it's also Cyber Monday today So keep an eye out for U.S. tech focused retailers According to Adobe Analytics The Black Friday sales that we saw at the back In the last week were actually a record high According to, once again, Adobe Analytics predicts We're going to have a record Cyber Monday in terms of sales So please keep an eye out for U.S. retail stocks On today's session And before we go, I just want to say it If you have any comments to make on this video Or any of the videos we've made here at CMC Markets Please feel free to leave a review on Google Reviews And that's all for me this week Thank you very much