This Week In Markets: 26th - 30th April 2021

Okay, very good morning to you. It is Monday the 26th of April and I'm joined by Sam North. How's it going, Sam?

Yeah, very good, thank you. And yourself, Ant?

Good, good. And, uh, of course, the reason why I've got you on today, the Amplify community, we all know that really today is your, your last appearance with Amplify before you've fled the nest. And go on to do your own thing. So for anyone who follows us on YouTube, this video will go up today. Obviously, huge thanks to Sam for all his hard work over the last— so it's been 6 years, in fact. Yeah, and I know you did a post on your LinkedIn, Sam, that's just gone viral, which is— I think that's testament to, you know, the fantastic work and mentoring that you've done over the years. So Enough of the, uh, the bro love for now, but let's get down to business. Let's get down to business. So a quick wrap of the, um, well, let's start off with the charts as I always do with the briefing, and then what I'll do is I'll incorporate some of the news with the look ahead to then give you a cue to look at some of the respective charts from a technical perspective. But having a look at the, the charts this morning, it is relatively quiet I was just saying before we came on that, you know, part of when I, I look ahead for the week, I have a look at that weekend down via IG just to see the kind of type of opening that we can anticipate for electronic trade on a Sunday night. And absolutely flat, which kind of says it all. And from a weekend news perspective, um, there is of course ongoing difficulties and challenges being met from areas like India, Japan, many other places around the world at the moment on the COVID situation. But actually, if you look at the trajectory of those case numbers in those aforementioned areas, they've been relatively telling that this is now kind of baked into price as far as, to a certain extent, the global market is concerned. I know it was last week impacting the domestic market in India and it was underperforming. But I think for the moment, as far as global assets are concerned on what we're looking at, it's all kind of being digested and not really impacting sentiment a great deal. One thing that we did see in closer to home, mainland Europe, Germany's coronavirus infection rate rose at the weekend despite stricter restrictions, and their Finmin in Germany has said that they do not expect moves to ease curbs before the end of May. So to give you an idea of context on, on timing, the other only other notable thing is I'll touch upon In regard to some of the other weekend news flow, we had the Draghi plan. So Italy's reached a deal with the European Commission over its recovery plan, paving the way for it to be submitted to Brussels by the end of April. That was the kind of deadline anyway. So this is to do with that story we were covering last week where Italy plans to spend more than €220 billion from EU national funds to just help out in regards to the COVID response. So I don't think that's particularly new, but just more confirmation and update. And then we also— Bank of England commentary, and perhaps we can get pound up to kick things off because Bank of England Deputy Governor Broadbent spoke in— I think it was in Telegraph at the weekend, and he was saying he forecasts consecutive quarters of rapid growth and warned that inflation will prove less predictable. I've also seen Goldman Sachs note come out and they are saying that they foresee UK GDP as high as 7.8% this year. They're at the top end. The General Reuters average poll is around 5% for the UK, but 7.8%. GS are more bullish on growth than they are of the US at this point. And a couple of conversation pieces going on in the community about that this morning, about the pound weighing up directionally. But one of the things I was saying was about the fact that at the moment, don't forget vaccinations have taken quite— they've decelerated quite a lot. And as we go through then back into May into June, then this supply issue that's impacted the speed of which vaccines could be administered through April starts to then— we get over that hump. And as vaccinations start to pick up, I would anticipate that I still feel fairly, fairly more bullish cable than I do bearish at this point in terms of directionally. But perhaps you could kick us off with, um, the cable charts and have a look at that.

Yeah, absolutely. Let me just share my screen. Uh, yes, I'm, uh, I'm of the same view. I'm more bullish than bearish. And having a look at the chart, let's wait for this to load up. You can see that okay? Fantastic. So yeah, just looking at the pound, 1.40 marked the, the top last week, I think, on, uh, on Tuesday. We almost hit it Monday as well. But you can see this, the significance of this level. One test, two, three, four, five, six last week. The market cares about it. 1.40, round number, strong resistance going back here to, to the last trading day of February. So for the next leg higher, that's kind of got to go. Um, to the downside, we saw one sort of 136.50s, which was a previous area of support and resistance, which has held here. And we had a few tests to the downside where it just couldn't break lower, the bears really sort of giving up the fight. And we pushed above, uh, 138. That for me is, is almost a bit of a line in the sand where I'd say below there, then I'd start getting had worried about being bullish the pound and the trend line that goes back to July last year, that goes, then we start to see a bit of an unraveling. I think we'd have to see something fundamental for that to happen though. I remain, yeah, I remain bullish on, on cable and pound in general. Um, it just might be that the next leg higher comes to, you know, to fruition after that 1.40 break. And as with a few of the dollar pairs, which I'm sure we'll be able to cover, uh, this morning. It's just worth keeping a watch. Again, if we do get pushed to the upside, those 2018 highs, in this case the double top from, uh, January, uh, and April, which marked the, the top for a while actually. And we obviously haven't come and traded since there. So that's how I see the pound. I think for now, if you're, if you're long from lower down, you're happy. I imagine people moving their stops up trend line below 138 as well. So last couple of days, it's looking okay, I would say, for the pound bulls. Yeah.

And lots of news over the weekend about Dominic Cummings and Boris Johnson. But what I would say for that is, as bad as it might look for Boris with some of the comments that he's apparently said, I honestly don't think that that's a big deal as far as the price of pound is concerned. I don't think that's what markets are looking at. I think if it wasn't for the fact that this is coming out of Dominic Cummings, perhaps people might take it a little bit more serious because he definitely is a man scorned. So, and we know of his character. So I don't think it's particularly that big a deal for now, at least. Who knows what he might come out with and can he destabilize the government? I guess that's a potentiality, but I don't think we're quite there on that point yet. The other thing then is, I don't know if you want to get copper chart up, Sam. The reason why I wanted to talk about copper a little bit was because Not only is copper generally supported by the reopening trade, particularly that of China, which has obviously commenced a little bit earlier than the rest of the world, and that being a key, obviously, on the demand side component for what's underpinned the rise. But on the supply side, Chilean port workers called for a strike today, for today, in response to the president's move to block a bill allowing people to make a third round of early withdrawals from their pension funds. And of course, this is very important because Chile accounts for about a quarter of the world's supply of copper. Um, so, so how's the copper chart looking at the moment?

If you're long copper, very good, very good. I mean, it's, it's flying. Look at it. It's, uh, it's trading the highest we've certainly seen in, in, in the year. And having a look at the weekly chart here, you've really got to zoom out to see, uh, the last time we traded in and around this, this point. And, uh, you can see this drawing horizontally here going back to 2000 2011. So pretty much 10 years ago, and, um, it's in sight, it's in sight. Those highs are very much in play. And, and I guess kind of like we were trading with gold last year towards the 2011 highs, it feels a bit like a magnet. So, uh, I imagine we're going to get traded on there, but it's been on— yeah, this, this dramatic push to the upside. But I would just be, you know, careful of any, uh, you know, profit taking up and around these, these areas. So get your long timeframe charts up, the levels marked on. You can see we're trading pretty much on, on some of those 2011 levels, albeit the all-time highs just a little bit above. In terms of the week, you know, when you, you do end up trading at such high levels, it is always worth just, you know, seeing how we close the week. Um, and of course, this is the last trading week of the month, so if we were to maybe finish the week and month below this high that we had on the 22nd of February, then it, you know, puts a little short-term bump in the road. But right now it looks, it looks super positive. And yeah, for those that, uh, got long copper, they're, uh, they're very much laughing. I actually did get long copper last year in and around here. Uh, it was going well, got shaken out, never looked at it again, um, which is— yeah, should have got back in, shoulda, woulda, coulda. But look, so it's, uh, on a Fantastic rise and trading at levels not seen for 10 years.

Okay, cool. Well, yeah, well, I won't mention that any further then. It's a bit of a sore spot. But let's move on to the US indices because this week there are a couple of things I want to talk about. We've got the Fed, we've got Biden's American Families Plan remarks, and obviously this comes on the back of that tax comment we had last week. We've also got US Q1 advanced GDP on Thursday. And you've got a whole raft of corporate earnings coming out in the States. So let's have a look at the chart first, and then I'll give a bit of an update on some of those news items.

Yeah, so the S&P trading just under 4,200, which of course would be— if it hits it the first time in history, it's again like copper, been on an incredible, an incredible run in recent weeks. A bit choppy last week, in fairness. This is the 60-minute, and I'll just put the pivots on to sort of give us a day by day of it all. And you can see we, we've had good days, we've had bad days, and another good one on Friday. Um, so, you know, is that going to continue? Potentially. You know, there's— you just mentioned a few interesting things to come out this week which could all be market moving. I think to the downside, probably worth having on this trend line here. It's not perfect, but I think it's something that the market would look at, certainly if we were to, to move down. And that could, you know, almost be where you're going to have a lot of stops. There's a, you know, key sort of support point here, and that could be the unwind. Above there, there's still some nice areas of support which I think would, you know, be attractive for people to look to get long. 4141— people in the Discord room will remember us talking about this in a lot of detail last week, just the significance of it. I think the market still cares, and you can see on Friday that gave way and we pushed on, and we— yeah, in futures made a new all-time high um, on the, on the sort of the end of the week, the close of the week. So yeah, that I guess, you know, looking at this for new opportunities if you're not in a trade can be slightly tricky. Um, but there's always the break above, breaking close above the all-time high, or for us to sort of come back into these areas of what are now support for that next leg up. To the downside, uh, as, as a bull, I wouldn't really be worried unless we get below 41.20 on the S&P, I would say.

All right, well, just a quick word then about the Fed and Biden's speech and the data, and then we can look at the NASDAQ for the earnings because there's a lot of tech names coming out. So, um, the FOMC's on Wednesday night, of course. I would say though, this meeting potentially not a great deal of interest, and therefore subsequent movement— everyone's focusing on on June. And to that extent, that's when we'll have the updated projections, we'll be more advanced in vaccinations, reopening, so on and so forth. So this meeting, given as well just how kind of, I guess, strict the Fed have been, they're just sticking to their, their kind of party line for the moment, irrespective of some improvements that we have seen economically. I think that will remain the case. So Powell, Powell is far too efficient at managing these, these meetings now. So in the subsequent press conferences, things like that, I don't think he's really going to say a great deal to really move the needle too much in that, that respect. In terms of Biden, he is on Wednesday as well giving his remarks on that American Families Plan, as we know, and that's where the proposal comes around the capital gains tax, which added to some of that end-of-week volatility we had last week. I think people have kind of rationalized that headline. Um, you know, talk of a tax as high as 43.4% is unrealistic. I'd say for the people earning over a million dollars, it's very much the starting post for the negotiation now to get underway. Um, I was reading again some banknotes over the weekend. They're kind of talking about the similar thing. It'll probably be scaled back to a certain degree over the period ahead. So I guess in the interim period, what will be interesting to look out for is, you know, more centrist Democrats. I think Piers was talking about this a little bit last week. So Joe Manchin might be one where any commentary out of those guys would be quite key, given how kind of wafer thin the margin is in the Senate and the ability that whatever Biden's trying to force through his administration, he's going to need the absolute backing of the Democratic Party. Because of how even those numbers are. So the sting out of that speech, I'd say, has kind of been taken out a little bit by what we saw last week. But I think for a large part, the market's kind of over that story for the time being. As far as data is concerned, you do have the Q1 advanced GDP on Thursday coming out of the States. Headline expected 6.5%. So really picking up pace. However, there's, uh, there's something in markets called the Atlanta Fed GDPNow model. Some of you may have not heard of that, but essentially it's a, it's a statistical modeling, um, kind of process that's done by the Atlanta Fed that a lot of people give weight to because unlike them, the kind of these periodic updates of forecasters expecting what GDP might look like in the future. The GDPNow model just updates whenever there's a major piece of economic data in the US. And at the moment, that's indicating potentially that GDP on Thursday could come in at 8.3%. The median consensus is for just 6.5%, which obviously we're talking about an increase here from 4.3%. So even the median is a decent increase, but the GDPNow tracker is way up there. With that being said though, if the tracker is up there, well then it's not that surprising if you get an upside beat. Um, so I, this is what I guess gives the credence to a little bit to some of the— not, I don't want to call it the bears, but for people who are looking for that top to hold for now, let's say, to consolidate up at these record levels, is the fact that quite a lot of these things are priced in. And the US economic recovery kind of boom that we're on, to a certain extent it wouldn't be that surprising. I guess it's just how quickly does it actually materialize. But if the Fed hold the line as they expected to do so, and you start then layering in an 8% GDP story, I don't know, I think that's got to be supportive, if anything, for just either keeping it to where they are, or if not, pushing them up more constructively going forward if we're breaking out of that top end of that range that Sam's just looking at. So let's just pivot over to the NASDAQ then, because just before Sam looks at the chart, one thing I just want to quickly show is this. Which is the corporate earnings slate, and it's a busy one. You've got 181 S&P 500 companies reporting this week, 10 of the 30 Dow components. All the big guns are in here: Apple, Tesla, Amazon, Microsoft, Facebook, Google, or Alphabet, Boeing. Aftermarket today, you've got Tesla, and then Microsoft's aftermarket on Tuesday, Apple Wednesday with Boeing pre-market, and then Amazon will be after the close on Thursday. So pretty much the busiest week that we get with the first quarter earnings season. Um, I have shared a document already and in the Amplify Live community that kind of goes over a top level with some of these. I think actually for Tesla, um, the options market's pricing in a swing, I think it was, of about 7.5% either side. So Obviously sounds quite large, but don't forget you're talking about Tesla. So, um, I don't think that's quite so sensational as it might be if it were someone else like an Apple or an Amazon. But we'll get into those in more detail, the numbers and what to look out for, just before the close. Um, so yeah, chart-wise though, how are we looking in the NASDAQ, Sam?

Yeah, let me just, uh, let me share with you what a week, what a week that is for um, for earnings. Uh, NASDAQ, let's bring it on. Let's have a quick look at the weekly chart just as we go in. And, um, an interesting one. You could argue that momentum at one point was to the downside. We looked like we were going to close below the previous all-time high. We closed, I mean, just a tiny bit above, which kind of saves the day, moves us on to the next week, and it's kind of Okay, let's, let's identify that range at the top and the bottom, and what will be will be. Now, those earnings could drive us certainly either way, so, you know, be careful, you know, position sort of medium-term traders for the NASDAQ. One poor or really good earnings could, could send you, you know, out of that trade. But in terms of the key levels, obviously to the downside, it's, it's quite clear to see the resistance turns to support at 13,000 645, the all-time high to the upside. We've had 1, 2, 3, 4 tests of that. It's failed. So, you know, keep a— keep an eye on that if that was to go to the downside. Even if we are to break out of that range, and if it's on an earnings report, it gives me even a bit more confidence that dip buyers will be there. It's merely just a, you know, a dip in earnings, and we, we could see some, some more buying come in. So that— those highs going back here from February We eventually broke through, found support on the 5th of April. So yeah, that, that area, 13,340, would be something I keep a watch on. If we were to have a really poor week, just keep an eye on, on this potential trend line from the, the low of last year, which seems incredibly far away now, uh, but that would give or take a couple of days come in and around this area. So Certainly for those that are— sorry— looking for maybe a medium-term top, this would be the area for me that I'd say we really need to get below. And at the moment we are far away from there, and everything seems to be okay for now.

All right, well, let's, um, let's pivot over to the euro, because from a euro perspective there's a couple things happening this week, and predominantly at the end of the week. Um, in terms of Euro-inspired catalysts, you've got the flash CPI number and the prelim Q1 GDP print for the Eurozone as well. So I guess from now until then, perhaps looking at the dollar for, for a bit of direction. But then on Friday, the CPI number is expected to rise to 1.6% from 1.3%. So again, another meaningful uptick in inflation. But largely attributable to the widely flagged year-on-year base effects from the slump in energy prices that we saw this time last year in April. So I don't think— again, this is that management of upside increases in inflation in the short term of the period ahead. As far as growth is concerned, actually, analysts are expecting another negative print for Q1 growth, and technically that's two back-to-back negative prints. So we're in a technical recession as far as Europe is concerned. I don't think that that's going to be a negative for the euro though, because everyone knows that that's the case and people are more focused on— well, we already know economically negatives contract or growth is contracted, but it's going to grow in the period ahead, in the weeks and months as we've seen the timetables generally, even though Germany has delayed it till the end of May. Well, whether it's the end of May or June or the end of June, Whenever it is, these economies will reopen and it will aggressively come out of that slump. So I don't think there's too much room of concern there, to be quite frank. But technically, how are we looking, Sam?

Yeah, and I, I agree with that. I agree with that. Uh, euro, I think good, to be fair, for, for the bulls. Once we got above that 1.20, we did have a couple of days where it looked a bit hairy that it was going to break back down again and I, I liked the pound with a couple of those levels. Just switch back to pound quickly, around that 136.79. For me, the euro was the same. If we can get back above that 120 handle, a few pips either way, you'd feel pretty bullish about it. We then pushed on, good day Friday, up to the next level. Bit of profit taking there. We hit it this morning. Okay, you're keeping an eye to see where we close. Obviously there's a long way to go left in the day. But if we start to, you know, push back down and finish below the highs from the 20th of April, then you expect further downside. But, you know, at the moment I think it looks pretty good. And if we can get back above the, the high that we had, well, of today, but also more importantly that breakdown area from 3rd of March and 24th of Feb, you'd be looking for 122s. And as mentioned with the other dollar pairs, keep an eye should we get a period of strong upside on those 2018, in this case sort of a triple, quadruple top from, uh, going back here to January to finishing in March '18. So I think, uh, I think I'm positive for the euro. Um, I think, you know, it's one where obviously for it to come back down to 1.20, you're not happy if you're long, but I would still be okay being a buyer as long as we are above here. I think that's the way I would play this in terms of continuation plays. It's not really a trend line to have on, but as a bit of a guide, we're starting to get back above there. I think ultimately bulls will be comfortable if we can get back above the high of the day, and which makes it the week so far.

All right, and then the final chart we'll have a quick look at is oil. And Amina Baker, who's the kind of informed OPEC watcher at Energy Intel, she tweeted a few hours ago that, um, this Wednesday OPEC+ is planning to meet because there was a bit of a discrepancy whether they would or wouldn't this week. But there she's reporting that they are going to meet. So the plan is for ministerial gathering and a joint ministerial monitoring committee meeting. Most delegates seem to think no changes will be made to the output policy, is what she's saying. But she'll keep everyone posted. And yeah, I would agree exactly with that, that kind of statement. I don't see any reason at all for OPEC to make any change right now. Can't see how they can with what's happening with COVID in a lot of the emerging, kind of developing world space at the moment, and the implications that will have for subsequent demand and so on. So for now, holding pattern for, for that meeting. Don't think you're going to get any fireworks, I'm afraid. Um, but from your point of view—

yeah, I, I, I agree. I think from a charting point of view, if we were to get something negative for price, you know, there's this, this sort of trend that we've been having overall. Of course, as we know, if that is to sort of materialize, we get a breakdown of what was a nice area of support last week on, on the 22nd, previous resistance as well. If that goes, trend line goes, $60 goes, you can get some momentum, you can get some, you know, people unwinding those positions, and then fine, we can start maybe going back down to $57.50, or, you know, longer term, $33.60, $53.60. I don't see that personally, but you trade what you see, right? To the upside then, you know, potential to see if we have the trend line from the, the high of the year. Also, you can see we haven't had a close back above 63.61, which has been a very important historical level, just in a shorter time of course. But you can see we 1, 2, 3, 4, 5 tests in, in, uh, recent times to get back above there. We couldn't. So that remains a key sort of, uh, swing high that I'd be keeping a watch on. Trend line that breaks, then we can look for the push to the upside. And of course if you are trading oil and prices pushing on, you've got to be aware of some of those levels going back here to 2018 as well. Much like those dollar pairs, the 2018 highs could well be talked about again. But for now, I feel like it's, uh, it's a wait and see. Uh, you can see right now it's pretty much stuck in the middle of, you know, the high of last week, the low of last week. And yeah, I mean, what will be will be, but I'd almost just be patient waiting for either a break below $60 or if we can get back above $63, $61.

Okay, cool. Well, look, that pretty much, um, wraps it up because I guess for a week's perspective then you've got a bit of a, a roadmap where we kind of peak and then things kind of stay up there until the end of the week, and then the beginning is a little bit more quiet. So earnings-wise, as I said, Tesla after market today, but otherwise Microsoft, Apple, Amazon all coming midweek. You got the FOMC on Wednesday. We haven't talked about it, but for good reason. I don't think it's that exciting. You've got the BOJ tonight going into tomorrow for the yen. And then, yeah, major earnings, the advanced Q1 GDP in the US Thursday, Eurozone flash CPI and GDP on Friday. So that's kind of lay of your land. But Sam, any words of advice for the community out there on your departing briefing?

Yeah, trade, trade what you see, not what you think, unless it's buying, buying stocks, and never stop buying. All right, thanks for watching.

All right, thanks so much, Sam.

Thank you, guys. Take care.