 Hello, traders at CMC Markets. Welcome to a new update by RRG Research for Monday, the 14th of August. And I'm recording this on Friday, the 11th of August, before the European markets are open. My name is Julius de Campanar and I am presenting to you from Amsterdam in the Netherlands. As usual, let's kick off this show with a look at the rotation of various stock market indices around the world. And here is the weekly RRG, which shows a transition of movement, so a rotation out of the markets that have been leading over the last few months into markets that have been lagging. You can see all these tails picking up inside the lagging quadrant and you can see how the markets that are on the right hand side of the graph have lost relative momentum and they're now all moving downward towards the weakening quadrant. The big picture is still for those markets on the right hand side to be relatively stronger than the ones on the left hand side. So for the time being, this is still a momentum-based transition, which could very well end up in a rotation on the right hand side for these strong markets and a rotation on the left hand side for these weak markets. Only time will tell. The interesting development is the rotation for the Dow Jones index, which is actually doing very well at a nice RRG heading inside the improving quadrant, especially when you compare it with the other US-based indexes like the S&P and the NASDAQ index. If we look at the same set of markets on a daily scale, then you will see that things are getting a little bit more fuzzy. This is not a very clear picture. These tails are all over the place and it sort of points to indecisiveness. I think that's exactly what the markets are telling us for the last week. If you look at the movements over the last week, it was a percent up, one and a half percent down, one and a half percent up. It was pretty volatile week. A couple of macroeconomic figures came out. The market didn't really take any very clear direction yet. Maybe that will happen next week, but it certainly didn't come last week. So I'm going to hold on to this longer-term rotational picture for these world stock markets, which is in fact still in favor of these New York, Fang, NASDAQ, Nikkei, S&P, Nifty indexes. And now that Jones seems to be coming. So I'm going to keep an eye on these rotations. Only when these tails are starting to pick up again, so the ones in green are starting to pick up inside weakening and rotate back up towards leading, and the opposite rotation happens on the left-hand side. Then we will know that these markets are still leading. If the rotation continues in the direction that they are, then you will see a shift more towards like Hang-Sang, Futsi, Australia, the DAX maybe. But all in all, especially the shorter-term picture, shows a bit of fuzziness in the stock markets around the world. And it becomes very clear when we change the benchmark to a 0% return, looking at it from a pure price perspective. And what we then see is that all these markets are going through a corrective mode. The center of the chart here is 0% return. So these are now all price trends instead of relative trends. And you can see that they're all moving towards the lagging quadrant. So all these markets are going through a correction in terms of price. If we take a look at the S&P, it's always interesting. And you can see that we broke that rising trend line and we're now resting on a horizontal support level. Former resistance now support around 44.50. And especially Thursday's Candlesaw Bar here, you can see how we opened higher. We had a pretty good day. And then towards the close, we sold off. We barely held on above 44.50. So if that gives way either Friday or in the coming week, then that'll very likely going to put more pressure on the development of the S&P 500. So please keep an eye on 44. Well, let's say 44.55 on the downside, 40 S&P 500 upside, 45.30. But as you can see, it's a little bit more cluttered with resistance. So for the time being with this lower highs, lower lows image in place, I think that the risk is very clearly to the downside here. You see how relative strengths picking up. And that only means that relative strengths picking up versus, in this case, the AQUI index, that's the MSCI world. It doesn't necessarily mean that it will also go up in price. That's a very distinct difference between relative strength analysis and price analysis. If we look at the Hang Seng index and it's moving sideways and it's going the opposite direction, the reason I'm picking up the Hang Seng index, because you can see how this is also probably more at risk of a further decline than it is for a rally. But you can see how the RRG lines around the strength matrix are rolling over, where we see rolling up in the S&P 500. Both charts in terms of price, probably more at risk for a decline than a rally in terms of price. The nifty is interesting because it's still holding up above its rising trend line. And you can see how the RRG lines are starting to move back up higher. The RS momentum line is already above 100. So that's putting the nifty index inside the improving quadrant very likely to move higher. So as long as the nifty holds up above that rising trend line, then it's very likely that we will get an end of this small downtrend. And a nifty will be one of the stronger markets in terms of international indexes. I haven't shown or talked about the chart of the US sectors for quite a while with you guys. And I want to bring it on right now. So this is the RRG, the weekly RRG for US sectors. And what you can see here is it looks a little bit like what we saw in the world indexes. A select group on the right-hand side, select group on the left-hand side, and they're moving in opposite directions in terms of relative momentum on the JDK RS momentum scale. So discretionary communication services technology, we all know these were the sectors that have been leading the market higher over the last few months. They are now losing strength. These tails are pointing lower and that means that money is rotating out of these sectors. Now where is it going? Pretty much to all the stuff on the left-hand side. The further to the left the weaker it is, the further to the right the stronger it is. So the two sectors that I really am keeping an eye on are especially industrials and materials. Financial is picking up really nicely and so is energy but they're still lower on the RS ratio scale. So industrials looking really good from a relative perspective and in terms of offsetting trades, so overweighting, underweighting in terms of sector allocation or pair trading, if you were just going to play long and short, then I think there is an opportunity to offset the industrial ETF versus the technology ETF. Because you can see how they are on very nice opposite rotational patterns and the reason I'm picking XLI and not for example XLB and XLF and XLE is because XLI is the sector that broke to new all-time highs and is still holding up very well above that previous resistance level. Let's take a look at the individual charts here. So here is XLI and here you can see that break to new all-time highs and despite the fact that there is a bit of a rollover very recently and you might even argue that we are in for a bit more of a correction especially when you look at the RSI you can see how that has built up a bit of negative divergence and the MACD is rolling over but the strength is on a relative basis on a relative basis that this sector has started to curl back up and is actually holding up very well above that former resistance level that should now start to act as support so that's around 10750 and if you compare that with the technology sector XLK which also tried to move to new all-time highs it actually moved to new all-time highs but it came back and when it when a sector or you know no matter what any security that breaks to a new all-time high and it's not able to hold above that level that's actually a sign of weakness and that's exactly what happened in the technology sector. You can see how it took out that overhead resistance all-time high levels we rallied we kind of tested it as support even depth below it and now we seriously depth below it and we're at the next support level around 167 this is not a very strong chart in terms of price but look at the relative how this is actually moved lower in terms of relative strength as well so if you want to play some some offsets or overweight underweight the industrial sector and the technology sector are actually pretty good candidates for that if we take a look at the new york fang index as we usually do and just to not make this video too super long and go over too many individual stocks i have looked for stocks that are sort of confirming each other on both the weekly and the daily new york fang rrg and this is the weekly rg and the tails that i really like here are netflix and amazon because they're inside the improving quadrant but at a very strong rrg heading and the ones that i don't like are amd which has moved from weakening into lagging and you can see how nvidia actually hooked back down from leading back into weakening and it's heading in at a negative rrg heading if you now bring in the daily rrg for this universe then you can see how netflix is actually moving in the same direction and how amazon is actually already powered into the leading quadrant so these two daily tails for netflix and amazon are absolutely confirming the strength that we're seeing here where they are still inside the improving quadrant so the daily tails for new york fang are absolutely confirming the strength that's building up on the weekly rrg now on the opposite side we had amd and nvidia nvidia is very clearly also here inside the weakening quadrant very rapidly moving towards lagging at a negative rrg heading so that is certainly confirming the hook that you saw on the weekly rrg and amd to a lesser degree it's inside the green leading quadrant it's coming out of improving but you can see that the heading is already lower so it's just about to rotate into the leading quadrant but it's already at a negative heading and that is pretty much in line with what's happening here on that weekly rrg so amd and nvidia are actually at a negative heading on both the weekly and the daily and we see netflix and amazon rotating in the opposite direction if we look at the individual charts for these stocks now let's start with netflix and you can see how that is holding up nicely above its breakout level but the most important thing is the relative strength versus the new york fang index and it's actually starting to move higher and despite the fact that we you could actually see a head and shoulders type pattern here in this in this chart which would mean that a break below 410 would be a negative sign but it's especially the relative strength that is encouraging for netflix to move higher to potentially move higher i should say when we move to amazon also at a nice strong rrg heading and you can see how the rrg lines are rapidly rising above the 100 level level giving amazon that nice push into the leading quadrant and you can see where it's coming from that gap that pushed amazon above that former high it's now testing or it tested the next resistance level around 145 and it's now coming back and testing the former resistance as support so especially when we when we're able to hold up let's say above 137 that would be really good but we could even go into the gap area or be caught by that rising support line all in all it looks like amazon will be one of the leading sectors inside the new york fang index and mind you again i can't stress it enough this is all based on relative strength these lines can go up while the price of amazon is going down and the only thing that tells you is that amazon will be going down less fast than the new york fang index or any of its components so please keep that in mind when you do relative strength analysis it doesn't necessarily mean that will go up in price the benefit is that it's going to be very helpful to find pair trades or over underweights in your portfolio on the opposite side in the negative rotations we had nvidia and this picture is starting to to build up here you can see last week we just broke out of that little rising channel we were testing the former rising support as resistance so we got a new lower high coming in then we broke below the previous low so that series of lower highs and lower lows is now really starting to take shape and then the first level of support is probably around 401 more importantly the rg lines are really rolling over right now and suggesting that there is more relative weakness ahead for nvidia which could push it into the lagging quadrant on that daily rg as you saw it and finally we've got amd which is inside something that could be labeled as a descending triangle where the low where the highs are coming in at lower levels each time and the lows are at a horizontal level so there is there is continuous support or has been continuous support around 107 and a half that is still keeping the market higher but sellers are willing to sell at a lower price as you can see from these lower highs coming in and that's causing that triangle to to to move to its apex for a for a good signal it should break out roughly around two third of the formation which is measured from the first highs roughly around here so about next week a break lower would execute a descending trial triangle and that would accelerate the move lower there is a bit of support left around 103 if you look at the lows here that were set in 2022 and then we got a couple highs here we tested here again so there's two support levels to watch for amd in the first one being 107 107 and a half and the second one around 103 if we move lower then it's going to very likely go to accelerate much lower the rg lines are indicating at least relative weakness within the new york fang universe i am going to leave it at this for this week i hope you enjoyed the show thank you for watching and i hope to see you again at a new update by rg research next week same time same place