 Good afternoon and welcome to the weekly market update with me David Madden Today's date is Monday the 21st of September 2020 and the time has just gone 1229 BST British summertime and it's been a fairly negative start to the European training session. There's quite a few negative stories going on here Essentially says carrying on from last week continue concerns about rising cases of coronavirus particularly in Europe localised lockdowns chatter and speculation of a London lockdown although The talk that is doing the rounds Seems to think that if you do have a lockdown in London, it won't be as severe as a lockdown that was imposed The restrictions won't be as severe as those imposed in March But nonetheless, that's hitting hitting stocks across the board Also, there's a story in relation to a number of big-name banks European banks HSBC Standard Chartered listed in London, of course and we've also and also Deutsche Bank in the mix as well in relation to appearing on a list of US Treasury Department's Banks which have had which have lodged and record and registered suspicious transactions. It just really kind of adds additional Bearer sentiment to the markets the likes of HSBC are there's a fairly big component of the first few hundred And it seemed to be a stock who's kind of managed over the years to largely Stay out of the negative news of the banking sector of the last decade or 15 years So this is can really kind of is this is really hit that stock pretty hard So but the kind of why you can the wider view is that the chatter of a London lockdown has hit the foot two hundred quite hard But also it's kind of these it's ribbed a lot effect Around Europe has been quite big as well. So we're seeing a broad sell-off across the board Some sectors would be hit more than others should there be into the lockdown imposed in London So the hospitality sector has been quite hit as has the travel sector We're also seeing it's a broad sell-off in all all oil and gas companies mining companies banks I mentioned about the HSBC Standard Charter story and also a house bill or so everything across the board is taking a pretty bad knock So what I'm gonna quickly move on to now is the week head article and for those of you who tune into my Videos and weekly basis, you know that I run through the week ahead Which can be found on a website seems to your markets calm under insight under latest news and analysis so Today we had full your figures out from Superdry Tomorrow we will have first half numbers out from King Fisher. Tomorrow. We'll have first quarter numbers out from Nike On Wednesday, we'll have the flat with the flash manufacturing We've been manufacturing service PMI numbers from Germany of France and the UK But we're also gonna have as well is on Thursday We're gonna have full your numbers from Smith's Groups and first half numbers from Cineworld on Thursday We also have the German IFO numbers coming out with an EU summit on Thursday as we do every single Thursday We have US jobless claims that'll give us a taste of what's going on with the US labor market particularly in light of some of the economic indicators in the US would suggest that they kind of the The economy the the recovery may be tapering off a bit and finally on Thursday Darden restaurants have Q1 results out So as always I'll run through some of the big indices Go on to some currency pairs and then on to commodities So starting off with the first 200 and the first 200 are the kind of big European and US indices has been the weakest of the bunch The recovery that I had from the March into into June didn't get anywhere near of the highs that were achieved Pre-pandemic and we can see here being a kind of nice series of lower lows and lower highs since June So classic example of a downward trend lower lows and lower highs if I caught aggressive sell-off in today's session here So if we do move any lower We could be looking at retesting the lows of the month head down towards a 57 67 and a break below that could take us down towards this zone here down around 5660 any moves the upside on the on the first 200 are likely to run into resistance in this zone here 6,000 big psychological number And we're currently trading, you know nearly 200 points away from that And if you do head north of 6,000 keep an eye out for this zone here We're by both the blue line the 50 moving average and the yellow line the water day moving average Both those metrics can effectively kind of coincide with each other. So a fair bit of resistance there You know, we had the lower low in early September the lower high in mid September and the move turned lower again So we really would need to take out this area here The highs are kind of mid-September before we could kind of begin to think and try kind of shake off the wider bearish trend of the last few months I'll take a look what's going on over in Germany on the DAX The German market was in better shape. Notice how there is much better recovery and rally from late March Into all into early September. In fact, the the highs that were achieved in September were the highest level seen since The beginning of the pandemic so multi-month highs were achieved in September So we chose the DAX is in pretty good shape But we can see here at the last few sessions the market really struggled to gain ground last week to try to move higher But if I'm an aggressive move lower today, we were well below this blue line here They fit at a moving average notice how that metric acted nicely as support on a few occasions But now recently enough granted it did trade a bit below it But on those occasions it always managed to close above it, but now are firmly below so the sentiment as Turned sharply lower turned sharply sour if you do continue to push lower from here We could be like heading back down towards the lows of early August down around 12,515 and if you go below that we can then head potentially down towards this red line here The two-nity moving average and that comes to play at 12,189 notice how that red line acted nicely as support back and late July So it could be of importance again. If we do move on up higher from here We could be like you heading back up towards 13,000 we're currently around 12,680 and if you go beyond that we really need to be kind of taking off these the highs achieved here in the Kind of big kind of middle of September, you know, I'm going to say at 13,339 313,300 and then if you go beyond that we can even like retest the highs of early September Which of course were multi-month highs Take a look now. It's going on the Dow Jones Similar to the DAX has had a great recovery between late March and into into early September Multi-month highs were achieved in September. So the market's fairly decent shape But since then we've had the lower low a lower high and another lower low So sentiments turning over on itself We can see here at the when cash trading gets underway We're expecting the Dow Jones to open up around 27,183 so so the lows of today's future session We suggest we can be heading back down towards levels last seen in early August If you do press a lower from here, we could be like you heading down towards 27,000, you know Big psychological number and if you go below that we can then head that down toward this red line here The 20 moving average which comes into play at 26,287 and if you go below that you could be heading down towards this is area here 26,000 Any moves at the upside could occur resistance or from this blue line the fifthly moving average We can see that acting nicely in a few occasions a support in the last few months So could act at resistance in the future and the fifth of a moving average on the Dow comes into play at 27,550 and if you go beyond that we could be looking heading towards 28,000 Taking a look what's going on with the S&P 500 S&P 500 at the beginning of the month was at all time highs So I'll give you an idea how strong the rally has been in the S&P 500 in comparison with the Dow Jones Which is only a multi-month highs But since then like the Dow Jones, we've had the lower low. We've had the lower high and then we have another lower low Um, we could so it's just clear that we're kind of pressing lower on the S&P 500 If you take a look at the MACD histogram the MACD indicator We can see that after markets be moving lower. There's been a steady increase in negative momentum So the kind of momentum is with the bears So if we do press on lower from here, we could like head back down toward this line here in around 3,200 Not only is it kind of, you know, 3,200, you know a big a big round number But on top of that, we can see that on a few occasions it acted nicely as support So if it's actually that support in the past it makes it more likely that it'll act as support in the future Although there are no guarantees Any move to the upside could incur resistance at 3,300 And if we go beyond that this blue line here the fifth remove the average Which is previously acted as support on other occasions in the last few weeks at 3,351 that could act as resistance on the way up One of the tenets of the Dow theory Which we often talk about in my videos states that the averages must confirm each other Which essentially means if you're looking at a certain market and it's moving in a certain direction And if you see markets that are similar to us are also moving in the same direction You can become more confident that that that move across the board is going to continue So we've seen that the S&P 500 below is 50 day moving average We've seen the Dow Jones below is 50 day moving average And we've also seen the The the DAX over in Germany below 50 moving average and as you can see as you saw The FTSE 100 is well below its 50 moving average So you got some big indices there that are all below their 50 moving averages Should they all continue to remain below their 50 moving average Averages that would increase the likelihood of of those markets remaining in their more more recent bearish move One of the beneficiaries of the negative move in Stocks and kind of commodities has been the US dollar. So the last few sessions we've seen a bit we see some Buying of the US dollar whenever we've had negative days on stocks and commodities Which are deemed to be kind of risk on currents risk on assets The wider trend for your dollar is very much at the upside But more recently we've seen a bit of a sell-off So we did hit um, it's highest level than over in two years at the beginning of the month But since then it's been rather range bound We're drifting a bit lower the euros under pressure today on account of the dollar gaining ground because it's At the moment perceived to be a lower risk asset A risk-off asset if you press on lower here We could look at retesting this blue line here at the fifth of the moving average And that comes to play just to solve the fear I'm pretty close to it at one spot 17 65 If you go below that we could they really heading towards back down toward this zone here in one spot 16 96 And a move below that could take us down towards one spot 16 Any move to the upside in in um in your dollar are likely to recurrent resistance I think at the highs of about a week and a half ago in a one spot 1917 And if you got me on that we could be like heading up towards the the 120 area Taking like a pound dollar So obviously the the British pounds been under pressure recently gave them what's going on The uncertainty about the future trading relationship between the uk and the european union when the transition period ends At the very end of december And there's a possibility that the uk and the uk the uk and the eu could do with trading on wto terms come Early 2021 and that fear is putting pressure in the british pound So at the start of the month we saw pound dollar had its highest level since december So over about a nine month high But since then and renewed fears in relation to The uk the uk's relationship with the european union has the pressure on the british pound in addition to that Risk off sentiment in stock markets has the pressure on the dot has put upward pressure on the dollar and in turn downward pressure on the pound So we found a sharp move in the downside We said the lower low found a lower high It's fail to get retake the fifth day moving average It's turning over on itself again if you retake the recent lows here We could be heading back down toward this red line here the third removing average in a one spot 27 29 And if you go below that we could then be heading back down towards the lows of mid august Sorry mid july rather in a one spot 24 80 And if you go below that we could then be like you're heading heading down potentially down towards this this area here at one spot 22 51 Coming on to gold next for gold tradition as well when traders are in risk off mode, but The u.s. Dollar has been performing well in when um In relation to risk off sentiment and the dollar and gold is trading u.s. Dollars So the firmer u.s. Dollar has actually been hurting gold Um, so the wider movement gold has been very bullish We had an all-time high only at the beginning of august And since then we've been training in a narrowish range You know the broader upper trend is still intact We draw a trend line between the lows of mid august to the lows of early september We get this trend line here We're not too far, you know We're essentially being supported by that trend line at the moment while we continue to hold above that trend line The wider upper trend should continue and if you press on higher from here We could be looking at retesting The highs of last week in a one spot 19. Sorry 1973 if you go beyond that We could be looking at it towards 2000 if you do have a break below this trend line here We could be looking at it back down towards 1900 even the lows of the last few weeks It's gotten close to 1900 but haven't gotten quite there And if you do have a size of break below 1900 it could take us back down towards the lows of early mid august in at 18 63 And finally coming on to oil brain crude november contract Um You know oil would also pose a fault in the category of being a risk on asset So if the if these if there are perceptions that the the global economy Is struggling because of the COVID-19 crisis. It's likely we could see gay. We could see um Demand or perceptions of demand for oil taper off. So we have since we've seen some weakness in the oil market recently We have we did achieve, you know multi-month highs Five-month highs in the month of august, but known as how obviously kind of kind of coinciding with uncertainty in stock markets We've also seen a pullback in that a moving lower in in the oil market The wider upward trend of the last few months is is still intact I'm a bit concerned that we've had the lower low This could turn out to be a lower high and the market might turn over on itself yet again And if that is the case keeping up for this area here in around 39 spot 40 there thereabouts on a few occasions that area active resistance So it could active resistance in it again But if you do have a decent break below that that will be significant. Um, that could take us back down towards the lows Of uh of mid early to mid june in around 30 37 spot 93 And if you go below that it could take us back down towards the 36 area But keep in mind the wider trend is at the upside So if you press on higher from here and if you retake this blue line the fifth to the moving average Which actually has both support and resistance recently if you retake that at 44 spot all three We could be looking up heading towards 45 and then you could be like retesting the highs that were achieved In the early part of august That's all from this from this video this week having a good trading week and good luck