Welcome to the fortress a money order commentary the sizzle interest recording is 1:42 PM that Pacific standard Time today is generally 14th while one thing that really grabbed my attention today was the fact that you had some very sensational at headlines, but not a great deal of activity in the markets that you can see, for example, that the Chinese market is gone nowhere for the last four sessions and that's also something that we've seen. For example, with the S&P 500 hasn't really gone anywhere for the last four sessions, all that was in mildly negative territory in here today, but one thing the share is that there at a potential area of resistance and fact we have opposes confirming that this is certainly a period of time where people are starting to have opposing consolidation. And to think about what happens next. There's been a very impressive rebound since December 26 and now the big question is how much further is it going to go and whether it represents a medium-term low or a near term low and when I could really have an answer for that question until we see a higher reaction level that holds and we haven't yet seen that we also need to see that the sequence of Lord Valley Heights is broken, but obviously by the time that happens at the market will be well off. It slows the next thing we would need to see is that it sustains a move back above the trend mean but it at least needs to put in a higher reaction loaned in a higher high and then to hold those if I work give the benefit of the doubt to the upside, this is still very much a corrective phase and corrective phase meeting on going out for a year while if this is a medium-term correction, then we should start to see it putting in some support reasonably soon. One point that I think is worth much mentioning is that we are now heading into work. We are in the third year of the presidential cycle and the Federal Reserve is back to doing what it normally does switch is to tighten in the first couple of years and then to loosen back moving through into the second half of the third year so that that gives some impetus to the incumbent to that try and win the election so that that's that didn't work in 2008 I have, but it worked reasonably well in 2012 and at potentially will generally speaking, what we anticipate from the presidential cycle is that you get a meaningful correction in the first half of the third year of the presidential cycle and then a very meaningful rebound in the second half of the year and I think that something that we need to have in the back of our minds as we head into 2019. So think that's one of the more important things to add to consider that in here today. The second is that there has been a very meaningful rebound in natural gas prices and against a background of a very deep oversold condition out now were seeing a very clear that up are dynamic and that is a low of at least near term significance. One of the features of this market going into the winter season was that we have historically low inventories. So at this is a I think the big move that we had at the end of last year that was at reflecting just how tight the market is against the background when we do get cold weather will fact we had abnormally warm weather brought prices all the way back down, but cold weather now starting to move back into started to push prices back up again. I think were going to be in for a very choppy environment for natural gas prices going forward and I think the third at really noteworthy thing that we seen happen today is that the continued pace of M&A activity in the gold sector. So Newmont mining and has bought Gold Corp. I bought both shares were negative territory in here today. Newmont was down 10% and at gag Gold Corp. and having parked on the upside, finished at the lower side of its trading range will what that suggests is that at investors are concluding that the shareholders are not getting particularly good value here, so that's certainly something that is props weighing on the sector, but gold remains really quite steady and generally speaking, minds tend to consolidate at the lows and they tend to invest heavily in expansion at the peaks. Well, we certainly saw the expansion at the peak back in 2011 and the fact that Al Barrick has acquired Rheingold resources and Newmont is acquiring Gold Corp. of these are major at pieces of M&A activity in the end the gold mining sector. It suggests that we are getting some rationalization that at the there is an attempt to try and clean up the balance sheets that could potentially be not great news for at shareholders in the short term, but as long as gold prices remain reasonably steady. It should be beneficial for shareholders over the medium to longer term and gold is continuing to push higher at within this three year range. So at as long as that remains the case, then we can continue to give the benefit of doubt higher collateral ranging think the most likely scenario is that it is going to get back up towards the upper side of this range, but that was I think the other. The last thing a primary that piece of information here is that despite the fact that there were headlines left and right saying that the dollar had declined. The dollar index is pretty much unchanged in here today. What we really do have some action is in the pound and at the pound has been rallying since the beginning of the year it's bounced again from this 2125 area and it's now approaching the region of the trend mean. So this is the point at which had some questions going to be asked about at the ability of the dollar to continue to rally against it. But what is at our lease has been confirmed is that the pound is bouncing from around this 110 area. It's also testing its trend mean right now as well. So, obviously, in the UK. We are going to have the votes are on Teresa Mays add deal that tomorrow it's still looking quite likely that it's going to be defeated quite whether her government is going to be able to survive at that event also remains to be seen at the DU P and from Northern Ireland are almost certainly going to vote against it. But whether they will then turn around and continue to support her government remains a bit of a wildcard. While the FTSE 100 was at has been trending down since May and it paused in the region of 7000 in here on Friday and follow through on the downside in here today will the does look like at some continued potential for downward pressure, most particularly if the pound continues to rally. If we simply look at the chart, we can see very clearly that immediately after the at at the did the brakes and vote and the devaluation of the pound. The stock market was up very sharply. So if the pound continues to rally then that does represent a headwind for the market but from the perspective of the footsie 7000 is an awfully big psychological level, considering it represents the upper side of what is effectively a 17 year base formation. So then people are probably going to start looking at the sequence of high reaction bills since 2009, and at then 6000 becomes the next area of potential support. So it really is all to play for in terms of what exactly we can anticipate from the UK. I really think that regardless of what happens, there's going to be an awful lot of people are going to be disappointed and disillusioned with the political process, and that that is a significant challenge. Hopefully the one listen to one lesson, excuse me, that at the at the political class has two is learned from this is that there is at least half the people in the country are deeply unsatisfied with their lot in life and at that is something that that requires a rather urgent remedial care. But it's not something that can be solved easily. Not when we look at the high-yield sector again in here we had a very significant rally. It's now at the at the area of the first at potential that region of spell of resistance so high yields. Prices were in mildly negative territory here today, but not in the particularly dynamic fashion so this doesn't look like anything other than a pulse right now that doesn't preclude the potential that we will have a somewhat more volatile environment later, but at the Vicks index has contracted pretty steadily since at the at 26 December and it's unwound just about all of the advance that we'd seen prior to that. The big question is whether it could possibly sustain a move below 15. I rather think that's unlikely think that the we had a very impressive rally and that at this pulse that we had written with very inert trading is out of character with what we've seen previously. While there is an additional point here that that government bond yields. Now when we look at for example the 10 year treasury have studied up and at there is an awful lot of additional supply that is coming to market this year. That's from new issuance as well as refinancing then you have the fact that a treasury bonds mature on the 15th of the month and on the 30th. Well tomorrow is the 15th and at the next round of treasuries is indeed the runoff campaign that the Fed is running are going to mature tomorrow, so that is perhaps something that could influence markets. Generally speaking, we look back at the influence that this runoff is had on the stock market. It's generally tend to price it in while one interesting thing at that. I saw her in here today is the Morgan Stanley's implied pace of rate hikes at measure and it's gone negative out over the course of the over the course of December. So initially the market was willing to give the that the feds prognostications the benefit of the doubt and they believed that the Fed would continue to raise interest rates and that has been completely priced out of the market since December. Now their pricing in absolutely no potential for a rate hike in 2019 and potentially at all their pricing in one rate cut in 2020. But if we look at some more history for this index. What we can see that at this measure went negative. Back in at the middle of 22,006 and then it progressed downwards while we can also see that it was towards the end of 2007 that at the market had been pricing in the potential for significant rate cuts. So this is potentially a lead indicator for trouble in the market and now the big question is the extent to which is capable of rally. So this is I think as something to to monitor and I'll be adding it to the chart library while what happens in terms of the at the 10 year treasury when it gets back up towards the region of the trend mean is going to be an equally important arbiter of sentiment at as we are seeing with the at the S&P 500 2600 points of the Dow Jones at 24,000 points. Then when we look at the outlook for the European markets well there percent with uncertainty and at the at the. The next speech by Mario Drake. He is in the next few days. The rate decision by the at the ECB is not long afterwards and it sounds extraordinarily unlikely that the ECB is going to be raising interest rates that were gonna find out in the next few days whether Germany is in fact in a recession German government spending is due to trend higher in a meaningful fashion over the next few years so that they may not completely erode their surpluses, but there certainly going to cut into them and that additional spending at is the equivalent in Germany of a fiscal stimulus. It's simply not that sucker reframed his deficit spending, whereas France is most certainly going to be engaged in definite deficit spending and so is Italy and course if Germany is stimulating and in a recession will then that is going to at least enhance appetite for additional monetary easing measures in Europe so we certainly have the potential for sources of new liquidity to come into the market, but at the not readily apparent just yet. Then the at the yen has continued to advance and at the Nikki was in positive territory in here today, but the rebound that it had has not been nearly as impressive as we seen with other indices, it still has really quite a wide overextension relative to the trend mean and the, the rally has largely be contained by the extent to which the ad. The yen has had been rallying over the course of the last six weeks. What we had the flash rally in the yen at the beginning of the year and that is likely to represent a significant peak for at the, the yen, but it wouldn't be beyond the bounds possibility that that at peak is retested. So I think there is the. The scope here for some additional consolidation in stock markets, and indeed in the high-yield markets were certainly seeing the some of the biggest value investors starting to salivate at some of the valuations that are out there, but perhaps not in the fangs, but rather in some of the more distressed areas of the market like at General Electric, for example, whereas at PG&E is this I think is one of the more interesting that pieces of the the corporate bond market. We look at, for example, at the most liquid of our PG&E's ad debt. Don't think of got the that something has any bonds that that can't possibly be the case so maybe find a different part of it. I was looking at their bonds relatively recently and that they were trading at at at a position that was. I found rather interesting that the yield is in the order of about seven or 8% but we can see the at the extent to which we had a very big move at in the daily chart of the loans but it's only in the order of a couple percent whereas General Electric unsecured at debt is trading in the order of 15%. While that's I think an inconsistency in the market. The market is only beginning to pricing the risk of a company that really could go bust out for its liabilities from the California fires greatly exceed its available capital, whereas General Electric is the prices of its going out of business, and that's looking really rather unlikely, as so when value investors see these kinds of ad moves in markets while they're obviously going to get out rather excited because you don't get these kinds of bargains all the time but when we look at the wider stock markets were at a very important juncture at that. We've had a significant deterioration in terms of at the the trends that we had the consistency of the trends that was evident in 2017 is has been completely broken. And no, there is increasing evidence of completed top formation characteristics and if those completed top formation characteristics are going to be negated will were going to have to see higher reaction levels are going to have to see a sustained move back above the trend mean and so far at the number of indices that have been able to do that is comparatively small. For we do have at evidence of that is in some of the emerging markets and at the Brazilian index was in positive territory again in here today at the perverse but continues to move on to new all-time highs at the real continues to hold the majority of its gains out when we look at the Mexican peso. It's also been really quite firm. The big point question I think is whether it is going to be able to out rally enough to break the dollar sequence of higher major reaction levels evident over the last year and 1/2 at then when we look at Indonesia. The ad Jakarta compass. It has been able to sustain its move above the trend mean and at the nifty index in India that continues to range around at the trend mean as well so it certainly within the emerging markets that were started to see some evidence of that demand returning to dominance, whereas I think a number of the developed markets are at that very important junctures and that they need to. It really is for the Bulls to demonstrate that they can continue to reassert dominance. The fact that US treasuries are below their trend mean is, continue our lease continues to represent at demand for a safe haven because against a background where there is an enormous amount of additional supply could hit the market at there isn't a logical argument other than safe haven buying for white yields should be the slope and that I think with that I will outlive you for today and I wish all the best to all of you