S&P Cash Long Term: Uptrend Intact. Monthly Log Chart

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1 Andy Dodd MSTA adodd@louiscapital.com Twitter S&P Cash Long Term: Uptrend Intact Despite an initial slowdown in momentum following the break above 2120 in July, which was illustrated by the Doji candles in August and September, the index had still been making new highs and there was therefore no reason to be anything other than long in this timeframe. In my last overview, I pointed out that index was trading at its upper Bollinger Band which, whilst not a sell signal, is not usually sustainable for a prolonged period. March saw the index close a single point away from the February close with the price action leaving a Spinning Top candle, which was the first sign of some indecision in this latest leg of the rally but still not a reason to be overly bearish just yet in this timeframe. The small gap higher at the start of June leaves room for a Bearish Engulfing candle should the monthly close fall below and I would use such a close as a trigger to be taking some profits on longs in this timeframe. Monthly Log Chart

2 S&P Cash Medium Term: Uptrend but momentum lacking The break above 2401 a couple of weeks ago took the index to my 2408 target, which was derived from the bullish continuation pattern confirmed on the move above its neckline last July, but it has not really made much headway since. That break, accompanied by a bullish candle, allowed for more upside from that close and that proved correct as the index continued that rally the following week. There is also an uptrend intact but the lack of upward momentum over the last two weeks is shown by both the Spinning Top candles and the oscillators on this weekly chart. Whilst not reversal signals they are an indication that current levels may not offer the best entry point for news longs and the longer-term uptrend is some way below here, around the 2322 support S&P Cash Weekly Chart

3 SPX Short Term: Uptrend around 2400 I suggested closing longs as far back as 2 nd March because of the bearish Inside Day candle which followed the pop higher in the previous session as that was an indication that the rally had no staying power. The index has since failed to make much headway past that high and the price action over the last few sessions left a series of indifferent candles. As on the weekly chart the oscillators also show a lack of upward momentum and I see no reason to be a new buyer here because of that. There is still an uptrend intact just below 2400 which will limit downside whilst it is intact and I would look to be a buyer around that area if there are bullish signals accompanying a test. Daily Log Chart

4 NASDAQ 100 Short Term: Uptrend Under Pressure Despite an uptrend remaining intact the sharp move lower on 9 th June left a bearish candle, which offers resistance to any rally at its 5817 Marabuzo level, and attempts at rallies off that trend-lone have so far failed to break above there. The longer-term uptrend is also some way below current levels and a failure of the short-term uptrend would also confirm a bearish top pattern, on both this and the 60 min chart, whose measured target would be around 5400 if confirmed. Because of that I see no reason to be a buyer at current levels whilst 5817 is intact as a resistance. Daily Log Chart

5 NDX Intra-Day: Potential Top Note the uptrend on this 60 min chart coinciding with the neckline of a POTENTIAL top pattern. A break below the neckline is required before the pattern is confirmed but the measured target would be around 5400 should that occur. 60 Min Chart

6 Russell 2000 Medium Term: Sideways Channel The rally off the key support at stalled once again around 1415 and the index remains in a sideways channel between those levels. As a result I still see no reason to be a buyer until a clean break of the channel. Weekly Log Chart

7 US Yields Update. US 10yr Yield: Downtrend Persists The sharp move higher in yields following the US election caused many commentators to declare the end of the Bull Market in Bonds. However, technical speaking at least, the 10-year yield remains in a clear downtrend and the last rally failed to make a higher high. The longer-term monthly chart paints a similar picture and left a couple of bearish Shooting Star candles on the recent rejection of a break higher towards the downtrend. These suggest more downside from current levels in this timeframe.

8 US 10 Yr Yield Short-Term In the short-term the move lower following last weeks rate rise took it below a key support area, where the gap support coincided with the 200-day Moving-Average. The price action has not left any kind of bullish candle to suggest a rally from there just yet and the moves following previous rate rises are only too clear to see. Daily Log Chart European Equity Summaries Below

9 STOXX 600 Medium Term: Limited Upside The break above back in December confirmed a bullish reversal pattern, whose measured target was at the resistance, and I recommended a long at the time following that break. More recently, the break above a short-term downtrend channel back in February also left a bullish Flag Continuation Pattern which suggested more upside towards the target. I suggested closing longs following the Bearish Engulfing candle just below that target and the index has continued to drift lower since then. Last week saw that theme continue and I still see no reason to be long here having taken good profit based on recent price action. The reversal in momentum is clear to see on the oscillators and the next support of note is still some way lower, at Weekly Log Chart

10 SX5E Medium Term: Downtrend Above The break above 3157 in December confirmed a bullish reversal pattern, whose medium term measured target at the 3524 resistance was reached at the end of April, and I recommended a long because of that pattern at the time. The rally extended past my target but recent price action allowed for the addition of a new, flatter, downtrend line drawn from the 2007 high and upward momentum has since stalled. Note also that the long-term monthly chart left a bearish Shooting Star just below that downtrend last month which suggests limited upside in that time-frame. I still see no reason to be a new buyer here having taken profit as there is little upside in a long whilst the trend-line remains intact above Weekly Log Chart

11 SX5E Short Term: 3524 Key Support The index broke above its old downtrend as it gapped higher on the first-round French election results news and that break was followed by a bullish Flag Continuation Pattern, which suggested more upside towards the 3738 resistance. However, the bearish Shooting Star of 9 th May was an indication that the target would not be reached and the index sold off following that candle to test the 3524 support area, which I pointed out in my last note, last week. That support coincides with the upper side of the previous downtrend and I therefore expected it to at least slow any move lower, especially as there was further support at the 3529 Marabuzo (derived from the bullish candle left by the break higher. The support held in Fridays session despite the index trading below it intra-day and there is a chance of a shortterm rally from current levels. However with the longer-term downtrend still intact above such rallies should provide good selling opportunities and I would therefore still look to sell any rally back towards that downtrend, or a break below 3524, which would allow for a move towards the uptrend and support below. (around 3417) Daily Log Chart

12 SX5E Long-Term : Bearish Candle As I mentioned above the SX5E monthly chart left a bearish Shooting Star at its downtrend in May as it rejected the break higher. This suggests that there is now limited upside in this timeframe and I see no reason to be a buyer here based on that candle. Monthly Log Chart FX & Commodities Quick Comments Below

13 Crude: Downtrend Channel Intact but at Support The short-term downtrend channel remains clearly intact on this daily chart and the move lower has now reached the lower end of that channel. I would expect limited short-term downside from here however as the lower end of that channel coincides with a key support at 44.2 and would suggest taking profits on shorts as a result. Daily Log Chart

14 Gold: Downtrend Intact In my last note I pointed out that, whilst the downtrend channel remained intact, recent price action suggested a potential break above that channel. The higher lows on the last pullbacks were the reason for this and I said at the time that I would NOT be a seller this time if the top of the channel is tested. Instead I was looking to reverse to a long on a clean break, as such a move would allow for more upside towards , which is a resistance on the longer-term weekly chart. I should have trusted the trend as it held when tested a couple of weeks ago and risk reward it therefore to the downside still whilst that remains the case. I would still look to buy a clean break of 1308, which would invalidate that trend, but a short with a stop reverse on such a move would work at the moment.

15 Dollar Index: Bearish but at short-term support. In previous notes, I said that the support remained key to the future direction, as a break would both confirm a top pattern and take the index below both its uptrend AND 200 day Moving Average. I suggested shorting such a break with a view to taking some profit on a further move lower towards That short was triggered a few weeks ago and the move lower came within a few points of that level last week. The price action in that session left a bullish Hammer, which suggested a relief rally from that area, but such rallies should provide selling opportunities in the medium term where my eventual target is around the support. Daily Log Chart

16 EURUSD: Target Reached In my last few notes I said that there was still scope for more upside as the rally had left a bullish reversal pattern, on the break above its neckline, and there was also now an uptrend intact below. That patterns measured target was reached a couple of weeks ago and the pair has failed to may any further ground since. Recent price action suggests limited short-term upside from here and the weekly chart also has a resistance area at , which has proven reliable historically, which will limit any such move. I see no reason to be long here, having taken good profit on the long, based on last weeks price action and a short with a stop on a close above recent highs has a good risk/reward. Daily Log Chart

17 Cable: Mixed signals but downtrend above. The break above left a bullish reversal pattern which suggested a further rally towards the longer-term downtrend and resistance at That level coincides with the measured a target for the pattern and I said in previous notes that a long had a good risk reward in the short-term. However, those with a longer time horizon should still be looking to sell such a rally as there is a downtrend intact which will limit further upside from that area. I added arrows to the chart a number of weeks ago to show the likely price action should the pattern play out as expected, which remain valid and the moves have so far mirrored those. Short-term positioning is now a challenge as the pair is at support, where the uptrend coincides with the 200 day Moving Average, but the longer-term trend remains lower and I would be a seller of rallies to that trend. Daily Log Chart Recommended reading list below

18 For a good understanding of the candlestick patterns mentioned in the report this book my good friend Clive Lambert is perfect. Paperback/dp/B00KLO7O2C/ref=sr_1_4?ie=UTF8&qid= &sr=8-4&keywords=clive+candlestic For an in-depth study of technical analysis this book by John j. Murphy is widely recognized in TA circles as the bible. Comprehensive/dp/ /ref=sr_1_sc_1?ie=UTF8&qid= &sr=8-1- spell&keywords=tedchnical+analysis+of+the+financial+markets For more information on any point and figure charts the Jeremy du Plessis book below gives an in depth tutorial. Comprehensive/dp/ /ref=sr_1_1?ie=UTF8&qid= &sr=8-1&keywords=point+and+figure+charting Note that these are general comments about markets and the time frames may not always match your investment criteria. As always position sizing is more important than the ideas and levels. I always encourage clients to ask for chart views and asset allocation ideas that have been written specifically for them and their individual time frames and risk tolerances. If you would like to play any of these ideas through derivatives our options desk will be happy to suggest strategies. Important notice / disclaimer This material was prepared by Louis Capital Markets UK LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority (FCA) under ref This document must be treated as a marketing communication for the purposes of Directive 2004/39/EC as it has not been prepared in accordance with legal requirements designed to promote the independence of research; and although Louis Capital Markets UK LLP is not subject to any prohibition on dealing ahead of the dissemination of investment research, Louis Capital Markets UK LLP applies this prohibition through its internal systems and controls. The analyst or analysts responsible for the content of this marketing communication certify that: (1) the views expressed and attributed to the research analyst or analysts in the report accurately reflect their personal opinion(s) about the subject securities and issuers and/or other subject matter as appropriate; and, (2) no part of their compensation will be directly or indirectly related to the specific recommendations or views contained in this research report. Louis Capital Markets UK LLP has effective organisational and administrative arrangements set up within the firm for the prevention and avoidance of conflicts of interest with respect to research Recommendations, including information barriers. This document is for the use of the addressees only and is not intended for nor should be disseminated to Retail Customers as defined in Directive 2004/39/EC. It may not be copied or distributed to any other person without the

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