 Hello traders at CMC Markets. Welcome to a new update from RRG Research for Monday 13th of June. I'm recording this on Thursday the 9th of June. My name is Trevor Neil and I'm presenting to you from London. With Julius de Campana we run RRG Research BV. Let's start with our usual update and look at how the major market indices have rotated. We start with the relative rotation graph of the major international indices versus in the centre here the MSCI World Index. Compared to last week when Julius looked at this everything is in the same quadrant as it was except for one index. Most of the US indices are in a relative downtrend and have a negative RRG heading compared to the MSCI World Index. The feature here is the CAC, the DAX and the FTSE and the stocks are all as a whole in relative uptrends. Over the past week they've moved further to the right from the improving quadrants the stocks has moved into the leading quadrant so compared to the rest of the world European indices have got stronger. The NICI index and the Australian index continue to have relative strengths. The NASDAQ is on a very bad trajectory heading southwest so that is weakening on a relative basis and also with very positive momentum. So the world still continues to dislike technology and no sign of pressure ending for that. Now we're looking at the same group of major world stock indices versus the MSCI World but the sampling is daily so each point here is a day so this is the progress during the week. In contrast to last week when Julius was covering this there was a switch round a sort of counter trend move in the shorter time frame against the dominance of the Europeans on the right hand side stronger and the US on the left hand side weaker but here now this week you can see that the situation has resumed that the weekly and the daily message are much more in line with each other. On the right hand side we've got the European markets yes we've got the UK 100 movie across into the lagging quadrant in the daily but as we remember in the longer term weekly it's further over to the right here but all of these European CAC stocks the DAX all in the right hand side a little bit weaker but in the right hand side. Left hand side we've got the S&P, the NASDAQ, the Dalgers and Duster average and moving on its own the Russell 2000 the messages here much more of alignment between the weekly and the daily messages with Europe outperforming the rest of the world average and the and US the lagging that continues to be the case. Moving now to the S&P index itself there's a weekly chart of the S&P. Now last week we sunk hard down to this 3900 area here picking up support from this previous resistance and and bouncing strongly up to now resistance at 4150 we've got one two three lows there and we've hit that level now. Looking at the big picture we've got impulse reaction impulse looks like reaction towards resistance. MACD on the weekly basis is giving a very clear message downwards so is this reaction move in the established now downtrend for the S&P? Let's look closer by looking at the daily chart of the S&P. Here we see that the bounce from 3900 up to the 41250 level and the various support levels which have now become resistance levels and we're now hesitating at this resistance level. We look at to the RSI for some help here we did see the bullish divergence at below Julius had pointed that out coming down strongly from it but now we've got a small bearish divergence at this consolidation area here which is a negative development. Given the longer term strong downtrend that we've got in this market shown in the weekly chart and this rally to resistance and stalling at resistance it's tempted to think that the trend the longer term trend the longer term downtrend is on the cusp of returning and a test of the 3900 level seems entirely possible so it'd be very interesting to see this time next week whether this has turned out to be true and we have continued this pattern impulse reaction maybe impulse ahead of us here. So it's looking heavy a lot of resistance above stalling at resistance diverging in the RSI at resistance and it looks highly possible that resumption of the dominant trend about to occur. Energy and commodities have been a counter trend beacon of strength during this decline in the US stocks and the S&P in particular commodities energy are up strongly this year in fact natural gas is 150%. The RRG chart here shows the SPY and the sector ETFs against it and we can see further this right here is the energy sector and look at that rampant movement we've had there and so this is really outstandingly and powerful message of the lead of the SPY is the energy sector but let's have a look at this commodity and energy sector and see which commodity rather than which share as Julius looked at last week when he looked at the RRG Russell 1000 momentum plus CFD in detail this RRG chart shows the active commodity futures contract traded in the US versus the Thompson Reuters Commodities Research Bureau CRB index which is used as a standard of commodities in in the US. The sample here is weekly we can see that there are leaders and losers and actually when we analyze what's on the left hand side of 100 here so underperforming the index itself it is the agricultural and the metals including the precious metals all on this side here coffee cocoa sugar silver and the meats cotton as well all on this side on the right hand side of the chart we have the energy markets heating oil natural gas WTI crude oil heating oil all on the right hand side of the chart here so this is really very clear demarcation energy to the right commodities to the left the rest of the quantities to the left agricultures and metals including precious metals to the left hand side what is outstanding is natural gas it's the furthest to the right and the highest that means that it's got the highest relative JDK RS ratio compared to the CRB index and also with positive momentum as well this slight turn here doesn't mean much at all it's outstandingly strong so let's have a look now at the chart of Henry Hub natural gas we've talked about this natural gas previously and the significance of this enormous base between two dollars and six dollars and the breakout of it this year and really the stunning moves has occurred since then but big bases like this can support big moves to the upside powerful message from the movie average convergence divergence which is still widening powerful move up pushing through any resistance there was around the eight dollar area and putting that sort of zone from nine dollars to six dollars as also a support area as a very strong very strong chart we're looking at a monthly perspective so it does look as though it's going it's pushing forward towards these resistance levels of 14 dollars and 16 dollars there is a little bit of a worry though the hub natural gas has got a little bit ahead of itself the breakout here from six dollars that's very clear and we are looking at the market eventually moving higher but we've got a short-term chart message here we've got a high high and higher high but series of false breaks to the upside bearish divergence in the rsi higher lows too so what is this this is a bearish wedge pattern a real classic reversal chart pattern i'll be very interested to see in this very strong market a really undeniably very strong market whether we might have potential correction starting and if you measure from the height of the pattern here downwards this would take us back to seven dollars i'm not saying it's going back to seven dollars not at all but it is inside this extremely strong chart from a weekly and monthly perspective we've got a sign that maybe it's done enough for now and some correction is due and maybe starting but let's just remember it's the energy which is driving and in particular the net gas which is driving us higher but this may have a short-term current so let's wait and see but a correction is the right word not a reversal i thank you very much indeed everybody for your attention and from julius and myself at rge research made a turn to be with you