 Good afternoon and welcome to the Monday market update with me David Madden. Today's date is Monday the 24th of February 2020 and the time has just gone 12 or 5 GMT and it's been a pretty brutal start to the training session here in Europe Essentially the coronavirus has taken as taken hold in Italy Sadly, there's been an increase in the number of fatalities in relation to the health to the health crisis With that a couple of provinces and a couple of regions in northern Italy appeared to be in a lockdown the number of towns essentially are in lockdown public buildings closed and This is called major widespread fear across European Across the Italian stock market, but also across the European markets European equity markets as a whole and that's built further down into Sentiment on the on the dial futures on the US index futures So what what's the kind of the development and this story has been that a Few weeks ago. They're gonna believe was or the traders have the view that that was the largely Far East health crisis or to be precise about Chinese health crisis now that we're seeing The spreading further in the Far East, but also here in Europe Particularly in Italy the fear is that this is going to be coming a global issue and seeing as European stocks were kind of held up held the belt relatively well onto the Short while ago the kind of traders are now taking the view that this what we're seeing in Italy could be chapter one of the kind of wider crisis beginning in Really kicking off in Europe. So keep mind, you know the stock 600 Only last week hit a record high This this morning Rather the story in Europe is very different. The footage made the Italian market is down in excess of 4% They had the foot to 100 cac and the dachs are all down in excess of 3% So you see massive losses across the board here on European equity markets. We've seen a classic and a risk-off Strategy stocks are lower on the flip side broadly speaking the Japanese yen is higher as is the Swiss Frank not higher against Every single currency, but the broad you're doing well and gold is doing well too. So It's another kind of class example of a Class example of a risk-off play What I'll do now is I take a quick look at the week ahead article run through the major economic Corporate stories of the week ahead and then I have a look have a look at some of the big markets So looking head to tomorrow. We have US consumer confidence tomorrow We also have fourth quarter numbers out from home depot as you do from Coca-Cola Full year results are respected from Metro Bank on Wednesday also Wednesday Taylor Wimpy the home builder They're going to be potting numbers on Thursday. We have US GDP for the fourth quarter Thursday as Martin's is going to be an interesting one the company's had quite a bit of problems in the last in the last time in the last number of In the last over months. So the full year update is going to be it's going to be importance Looking head to Friday. We have full year figures from the London Stock Exchange We also have full year figures from Rolls-Royce and also Friday. We have the Eurozone flash CPI rating So we take a look now at the puts we don't as you mentioned we've had major declines on European equity markets We can see here. We've got a sharp decline on today's training session We're basically falling back to levels last seen in in early December We're not a million you know that the lows of today's session have been too far away from this area here in around 7,132 there there abouts the lows of early December So if you press and lower from here these are the sort of areas we could be targeting And if you do go below this zone here, it could take us back towards 7,100 and move below that could take us back towards the lows of early October if you do have a rebound in the Infancy 100 we could be looking heading back up towards either say 7,300 or this red line here the 208 moving average and that comes in the play at 7,370 Taking a look at what's going on over in Germany pretty brutal session there as well We had a quite a large gap to the distance gap to the downside. We can see here that the We've been moving at rest below in the training session We've you know, we've fallen we fell to a level last seen at the beginning of the month So nearly three nearly three week low, but nonetheless, it's been quite aggressive sell-off If you continue to press on lower from here, we could be looking at targeting 13,000 big psychological number And if you go below that, we could be looking at targeting this zone here in around 12,900 we can see on a few occasions that that particular metric Active resistance in early October and on a few occasions In late October in mid-December and also late January on a few occasions that area Active as support and if an metric has been important in the past it makes it more likely it'll be important in the future Although there are no guarantee. So a break below that could be quite significant If you do look to kind of rebound from here on the on the dax We could be like you heading back towards this blue line here the 50 moving average and that comes in the play north of 13,400 and it's we'd really need to be getting back above that Before we could begin to think, you know what? Maybe the recent kind of scare relation it and the has come to an end I'll take a look at the Dow Jones now. We're calling. We're calling the Dow Jones massively lower You can see here that there was a quite large gap created on the on the on the open between Friday's close and the and the and the trading of Monday in relation to the our out-of-hours Pricing so we're spitting a large up on the Dow Jones was cast trading gets underway We can see here that that the lows of our session here on the US 30 haven't been too far away right from the lows Achieved in late January. So keep an eye for this zone here in around 28,000 164 and if you do have a break below that it could take us back towards 28,000 a big psychological number If we do see a bit of a rebound In the Dow Jones, we could be looking at heading back up towards this blue line here the 50 moving average That comes to the play around 28,873 But obviously that's a fair distance away from where we currently are so about a 500 500 points or so We're expecting the Dow Jones to open Take a look now on the S&P 500 It's a fairly similar situation whereby a fairly large gap was created to the downside But if you refer to the S&P it's holding up in a better better state than the in the Dow Jones But nonetheless is still looking relatively bearish There's a decent gap was created to the downside here. We're currently expecting the S&P 500 to open at two thousand three thousand two hundred and sixty six Keep in mind that the fifth at a moving average is north of that in around in around 3284 if we can continue to hold below the fifth at a moving average It's likely that we could see further losses in the near term I should that be the case if you press on lower from here We could be looking at targeting the loads made January in around This zone here in around 3214 And if you do have a decent break below that it could take us back towards 3200 or 3100 and 80 that 20 point zone as I mentioned we're seeing major declines in stocks we have seen a Decent move to the upside in the gold market gold has been pushing steadily higher the last few sessions on account of the fear surrounding the coronavirus crisis We're currently seeing gold in around 16 80 16 79 Which we're looking at we've hit levels today at last seen in early 2013 so given indication how strong The gold market is and if you look to press on higher from here the capability heading towards 1700 probably the next big kind of psychological number ahead of us Even if you do see a bit of a tapering off In the fears and we do see the gold market pull back a small bit seeing as we have gained ground the last few sessions We could look at a finding support in on this zone here in around for 16 49 1640 and even if you go below that this zone here in around the kind of 1611 zone This area here could also act as support notice how far we are from this blue line here Which is a fifth at a moving average that's well away That's in at 1553 or you have quite a large gap between the market and and this and this and the fifth Moving average it would suggest that the market is overstretched, but markets can remain over straight over overstretched There's nothing to say that it's absolutely going to turn around But just something mindful of that a gold market is looking reasonably overstretched at the moment now the other commodities which are not do so well Started starting off of a look at a brain crude We can see here that between early January and into the in the early February crude had a terrible month Sold off excessively for about four weeks also around the China health crisis The market had a rebound here on brain crude to kind of bounce back up for the kind of 60 zone Maybe not perhaps a bit north of it It's a big psychological number and then lo and behold the market has turned over on itself again And we put to be moving lower So if you do press on lower from here on brain crude We could look at retesting for recent loads of that early February early to mid-February in around 53 spot 67 and if you go beyond that, we could be heading down towards 52 We'd really need to be kind of taken out the other the highest year in around 60 spot 28 before we begin to think that the the market is going to Is market is going to shake off the recent negative trend and then if you do go beyond that Resistance could could come into play at this red line here. He turned the moving average in at 62 spot 68 That's Brent crude. I take a look at WTI It's a fairly similar situation where I had a fairly dreadful month between early early January and early February had a rebound rebounded up here Up towards 54 spot 41 We can see here at the Reba where the market the market kind of ran out of steam was in this kind of consolidation zone in around here The markets now turning lower yet again if you do break below 51 It could take us back down towards this zone here down around 49 spot 29 And a move below that could take us back down towards 48 similar to Brent We really need to be taken out the highs in kind of mid to late February before we can before we could begin to think You know what? Maybe the recent sell-off on the panic panic surrounding the health crisis has come to an end And even if you do head north of that We could run into resistance at this red line here the eternity moving average and that comes into play at 56 It's about 28. I take a look a couple of currency appears now starting off with Euro dollar So Euro dollar had quite a negative run for most of last week and had a decent rebound on the On Friday we can see here and I was quite a bullish candle here and could state I could appear the body of this candle here could suggest that that is a daily bullish reversal could suggest it but If it is a daily bullish reversal, you'd want to see that be confirmed by a continuation of the upward move Well, we haven't actually done that on today's on today's session So it's still not particularly clear why they were looking at kind of a turnaround point on Euro dollar Now if you take a look on the weekly chart, we can see here That there was granted on the weekly chart. We've had two excessive selling weeks And we had the long wick of this so it would denote indecision but there's still no kind of guarantee that the market is you're gonna fully turn around and I'm not overly convinced that we're gonna see a major rebound in your dollar Just because of today's session have started off well within the kind of body of a Friday's candle But that being said if you can get hold of both the lows of last week in around one spot 077 we could stand a chance of heading back up towards one or nine or potentially up towards one spot all 925 But if you do turn over ourselves and take ahead take out the recent lows It could take us back towards one spot 07 one spot 06 and the likes Lastly, I take a look at the British pound Versus the US dollar so we can see here that For the last few weeks, there's been a bit of weakness In the in the British pound versus the US dollar not excessively but just a small bit so we can see here Look at look at what the February From late January going forward. We had a lower low a lower high couldn't take off this blue line here Good to be moving average the lows of late February take off. I've taken up the lows mid-February We're still looking a bit on the kind of soft side in comparison with you know, the levels you're at it in mid-December So if you do drop back below the recent lows here in around one spot 2849 it could take us back to work down toward this zone here down around one spot 2768 But keep in mind if you do manage to push on higher from here get back above 130 Get back above the fifth of the moving average in at one spot 30 46 It could it could then put us on track for this area here in at one spot 32 And and then beyond that it could take us towards the late December highs of one spot 32 84 Keep in mind the wider term view over the last several months I've been very much at the upside on Paul and daughter. Just be just be mindful of the wider upper trend But also it is worth noting that Next month we're gonna have the the budget announced and this talk We could have be it could be a bit of a fiscal boost to the UK economy could be revealed in that particular update Now, thank you for listening. Please tune in next week and have a good trading week