SXXP *351.51* Key Resistance

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1 Andy Dodd MSTA adodd@louiscapital.com Twitter Equity Index Technical Dashboard The table below is intended as an easy to read reference of key levels and trends. For a more in-depth description please see my comments on the individual charts below. Market Supports Resistances Comment SPX Long Term KEY SUPPORT SPX Short Term KEY SUPPORT NDX Bearish Engulfing INDU 18,103 17,978 18,248 18,288 18,622 17,978 KEY SUPPORT 17,579 17,210 SXXP *351.51* Key Resistance SX5E Long Term SX5E Short Term UKX *6412* 3149 *3157* 3239 Downtrend at Bearish Candles Key Support Short Term Futures Dashboard Future Supports Resistance Comment SX5E (VG1) DAX (GX1) 10, ,524 10,386 10,316 10,127 10,034 S&P (ES1) Key Resistance 10,804 10, ,917 Uptrend at 10, Key Support Charts along with more detailed comments below

2 S&P Cash Long Term The break above 2120 back in July allowed for the potential of more upside as that level had acted as a good resistance to any attempt at a rally since February That break came despite of a bearish Hanging Man candle in June, which had suggested that the level would hold, but the price action since the break had shown a lack of upward momentum. That lack momentum was highlighted by the second successive Doji candle in September as the index has rallied off 2120, to close pretty much unchanged for the month and it has yet to manage a close above that of July, closing September 5 points below that level. The Dojis are however not bearish reversal signals in their own rite and downside from here will still be limited whilst the 2120 level remains intact as a support. They do however suggest that current levels do not offer the best entry point for new longs or adding to existing positions and I would still urge caution here as a result. Monthly Log Chart

3 S&P Cash Medium Term As on the monthly chart the break above 2120 invalidated a sideways channel that had remained intact since February 2015, allowing for the potential of more upside. However, I saw the ever-decreasing size of the candles immediately following that break as an early signal of a lack of upward momentum, saying a few weeks ago that a test of 2120 as a support was likely. The level held for the third time last week but the price action remains unconvincing and left another Bearish Engulfing candle. MACD had already crossed below its signal line a few weeks ago and there has been continuingly bearish RSI divergence at the same time. Thus, I still see no reason to be a new buyer here and would expect a sharp move lower should that 2120 fail as a support. S&P Cash Weekly Chart

4 S&P Short Term I suggested taking profits on shorts on the first pullback to 2120 a few weeks ago and the rally from there took the index back to the gap resistance at That area also coincided with the neckline of a bearish top pattern and I advised re-opening shorts as such return moves are common in such patterns, usually resulting in a continuation of the move lower which played out as expected. Since then the 2149 Marabuzo resistance, derived from the bearish candle of 11 th, has capped any attempt at a rally and I have remained short in line with the downtrend channel. I said last week that, once again, 2120 would be the key level to watch and that level held in Fridays session with the session low less than a point below there. I would still look to add to shorts on a break below there next week. Daily Log Chart

5 Dow 30 Medium Term The Industrials also broke to new all-time highs back in July but, like SPX, the price action had shown a lack of upward momentum. That lack of momentum was shown by the Doji candle on the monthly chart in August, as the index failed to extend recent gains following the break higher, and this was followed by a Spinning Top last month which has a similar meaning. The weekly chart also left a Bearish Engulfing candle on the pullback a few weeks ago and such candles are often good indications that a rally has run its course. The oscillators also continue to show bearish signals, with MACD crossing below its signal line and bearish RSI divergence. I said a few weeks ago that the rally off the 17,978 support looked to me like a re-test of the neckline of a bearish top pattern on this daily chart and that such return moves are common in such patterns, often preceding a sharp move lower. Since then the index has drifted off from that neckline as expected and I still expect a move lower from here should the 17,978 support fail. I suggested taking some short-term profit on shorts because of the Hammer there on 13 th but the index remains in a downtrend channel and I see no reason to be long whilst that is intact. Daily Log Chart

6 DJ Transportation Index The rally from the 7715 support took the index back above the neckline of a potential bullish reversal pattern but it still needed to make a high above 8149 to confirm a break. The move was rejected three weeks ago, with the price action then leaving a bearish candle on this weekly chart which suggested a pullback, and I saw no reason to be a buyer as a result. Last week saw the index continue to consolidate below that level, with the price action leaving another Spinning Top showing the indecision around current levels. I still see no reason to be a new buyer based on recent price action but would buy a break above 8149 which would suggest that the recent pullback has been a re-test of a bullish continuation pattern. The bigger support area is also some way below current levels at 7700 and coincides with the top end of a failed longer-term downtrend channel. Weekly Log Chart

7 NASDAQ 100 The gap lower on 9 th September confirmed a bearish Island reversal pattern on the daily chart, which was initially ignored as the index went on to make a new all-time high. However, the price action on that rally showed a significant lack of upward momentum and I therefore urged caution, expecting that to be the last leg of the rally. This weekly chart had also left a series of bearish candles, the latest of which was a Bearish Engulfing candle last week as the index closed near the low and below the 4816 level once again. The daily chart also continues to show bearish RSI divergence I remain bearish however and still expect a pullback towards the uptrend and support at The key short term level to be aware of next week is the support at 4760 (daily chart) was a break below there would confirm a double top pattern on that chart and I would expect downward momentum to increase should that fail. Weekly Log Chart

8 Russell 2000 The Russell broke below the 1206 level in Thursdays session, confirming a Double Top reversal pattern, whose measured target is just below the 1150 support, on this daily chart. The weekly also left a bearish candle as the index closed at the weekly low but needs to break below the support before a sharp move lower. That level also applies on this daily chart and the move lower paused around there in Fridays session with the days price action leaving a Spinning Top to show the indecision in the market. Once that level is out of the way I would expect the move lower to gather pace and see no reason to be anything than short here. Note that this index is widely regarded as a better indicator of the US economy overall than the SPX and its moves from here may therefore prove crucial to that of the wider market. Daily Log Chart

9 MSCI World Index I don t usually include this in the weekly note but the move lower last week took it to a key area where an uptrend coincides with the 1688 neckline of a potential top pattern. The price action next week will likely prove crucial to the longer-term direction as a failure of that 1688 support would both confirm the top pattern and invalidate the uptrend. The measured target for the pattern should that occur would be almost 4% below there at Daily Log Chart European Equity Summaries Below

10 STOXX 600 The level remains key, in both the short and medium term, as it is also the neckline of a POTENTIAL bullish reversal pattern. I recommended a short because of the bearish Dark Cloud Cover candle left by the rejection of a break above that level back in September and that candle proved a good warning of the subsequent move lower from there. The move rallied off the support but the price action did not leave any kind of bullish reversal signals on either this daily or the weekly chart. There is also still a downtrend intact, which dates back as far as the 2015 high, and I am still happy to be short in line with that trend. Longer term my stop/reverse on a clean break of is still valid as that would confirm the reversal pattern, whose measured target would be around the resistance. Daily Log Chart

11 SX5E Medium Term The index has been trading below the neckline of a large bearish top pattern since the failure of that neckline back in January and risk reward in the longer term has remained to the downside ever since. It has continued to trade sideways below 3157 all year and, more recently, has been consolidating below a resistance at 3089 with breaks below 2978 so far being rejected. The latest rally off that level took the index just above 3089 at the start of last week but the price action in that session left a bearish Inverted Hammer which proved a good warning of the ensuing move lower from there in to the end of the week. Should the index manage to break above there I would expect a small pop higher but there would be little value in buying such a break as upside would be limited whilst the downtrend and 3157 resistance remain intact and I am currently short on my short-term futures view. That 3157 level is also key in the longer-term as it is the neckline of a potential reversal pattern on the weekly chart. Daily Log Chart

12 DAX Cash Short Term The rejection of a break below the 10,365 support on 13 th October left a bullish Hammer from where the index continued its rally to close just above a downtrend. This allowed for more upside but the candles following that break showed a lack of upward momentum and I therefore shied away from buying that break, especially as the 10,828 resistance was not far above. That level proved too much for the bulls in Mondays session and the price action then left a bearish Shooting Star, which suggested a pullback from there. This was replicated in the next session and Wednesdays gap lower left a similarly bearish Island Reversal and so the sell off into the end of the week came as no real surprise. Short-term positioning is now a challenge as further downside will be limited whilst the uptrend and support at 10,594 remain intact and I suggested taking some profits on shorts at the corresponding level on the futures chart in Fridays note. The weekly also left a Spinning Top candle which shows indecision around these levels but is not a reversal signal. Future moves from where will depend on what fails first but I remain short in small size having taken some profit. Daily Log Chart

13 Dax Cash Medium Term The weekly chart is a little more constructive as it shows the break above the downtrend back in August and the subsequent rally off the upper side of that failed downtrend. There is also a shorter-term uptrend now intact but the index still needs to break above the 10,802 resistance before a meaningful rally. That level held last week and the pullback in to Fridays close left a Spinning Top candle which shows the indecision around current levels but is not a bearish reversal signal. Should the index manage to break above 10,802 I would be happy to buy such a break as there is not much in the way of resistances until the 11,431 level. Weekly Log Chart

14 FTSE 100 (Cash) I previously suggested taking profits on longs following the bearish Hanging Man candle a few weeks ago as that came at the 6950 level, which was at the time a key resistance that dated back as far at the 1999 high. That candle suggested a pullback from there but was ignored as the index broke above there and the resulting pop higher took the index within a point of the 7123 resistance, which was the 2015 high. Since then the index has gone nowhere with the price action last week leaving the third successive Spinning Top candle, showing the indecision around current levels, and I am remaining neutral until either a break above 7123 or a failure of the uptrend. Short-term charts suggest it will be the latter. Weekly Log Chart

15 FTSE 100 Long Term As a reminder Mondays close could be pivotal as the index is still struggling to break higher and a low close would leave a bearish Inverted Hammer on this monthly chart. Should that occur it would suggest a move lower from here over the coming months and I would use such a signal as a trigger to be taking profits on longs in this time frame. Monthly Log Chart FX & Commodities Quick Comment Below

16 Crude: Continues to consolidate below the neckline of it POTENTIAL bullish H&S reversal pattern and I said last week that the ever-smaller candles of the previous three weeks suggested that it may struggle to do so. Last weeks move lower came as no surprise and the longer-term monthly chart will also leave a bearish Inverted Hammer on a close at current levels which would suggest more downside in that timeframe. (see Below) Crude Monthly Chart

17 Dollar Index: The rally following the break above its short-term downtrend a couple of weeks ago reached the Marabuzo resistance last week where it posted a bearish candle on this weekly chart. This would suggest at least a pause in the recent rally but the longer-term trend remains higher and I would look to be a buyer on a pullback to that uptrend. The short-term daily also shows the change in momentum as RSI moves back down out of overbought at the same time as the bearish Inverted Hammer of 25 th.

18 GBPUSD: I still have a 1.08 target for candle which is the measured target of the bearish Pennant Continuation Pattern and, despite the bullish Hammer left on the flash crash day, rallies back to the short-term downtrend remain selling opportunities. EURUSD: Continued its move lower from the key level and I would still expect a test of & very soon. Longer-term charts are also bearish and, should those supports fail, expect a move toward parity or below.

19 USDJPY: The $ rally following the break above the downtrend and cloud resistance continued last week to reach the level where it stalled in Fridays session to leave a Spinning top candle. With an uptrend now intact and the cloud n ow providing support I would expect a pop higher on a break above there next week and there is no reason to be fighting this rally just yet. The weekly paints a similar picture.

20 GOLD: Continues to consolidate below the 1273 resistance which once again last week and, whilst there will be scope for more upside should that fail, I would still look to sell a rally back to the 1308 resistance and downtrend above. The bigger support is still some way lower at which, coinciding the top end of the failed downtrend, I would expect to make a good long entry level on a longer-term view. Note also how the 144 day Moving Average, which I use only for Gold, is starting to turn lower and the 50 crossed below the 100 day a few sessions ago. Daily Log Chart Recommended reading list below

21 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

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