 Hello and welcome to CMC Markets on Tuesday the 22nd of September and the weekly market update and we're finally out of the other side of the FOMC meeting and unfortunately we're none the wiser as to the timing of a US rate rise. The Fed left monetary policy unchanged and the likelihood is that we're probably going to get some form of action potentially in December. It's unlikely that we'll get a rise in October simply because there is no press conference. So in essence the waiting game goes on. What does that mean for equity markets going forward? Certainly what we've seen thus far over the past few days has been an awful lot of indecision but ultimately the fact that the US didn't hike rates last week hasn't had the effect on stock markets that we expected. We've had further growth downgrades this week from the Asia Development Bank. That's hit the mining sector really hard. It's hit global stock markets really hard. Notwithstanding the fact we also have another corporate scandal and in that context I will be looking this week at the UK 100, the FTSE 100, the German DAX and the German automotive sector as it undergoes its own deep water horizon moment, its own BP moment. The only saving grace is no one has died but ultimately I don't think that is going to save the the automotive sector not only in Germany but in Europe as a whole from a very rocky ride over the course of the next few weeks and months. Okay so we're going to start with the FTSE 100, the UK 100 and in the aftermath of last week's Fed decision and the growth downgrades that we've seen earlier this week we've seen a massive sell-off not only in the mining sector, also in the oil and gas sector, the automotive sector and the pharmaceutical sector and there are a number of reasons for this but ultimately now that we've broken below the 6,000 level on this daily chart here I think it's safe to assume that the pressure is now building up for a retest of the lows that we saw earlier in August around about the 5,800 level and I think that in the process is going to make it very very difficult for other European indices to not go lower as well. Certainly in the US we're struggling to rally as well because I certainly think in the context of a potential US rate rise we've merely deferred it certainly that's what Fed policymakers are leading us to believe so ultimately we could well see a stronger dollar that's likely to raise the potential for the Fed deferring a rate rise even further and in the process probably put further downward pressure on stock markets. So FTSE 100 remains under pressure if we're able to get back above that 6,000 level then the range highs still remain around about 6,270 level but given the direction of the daily oscillator the pressure at the moment appears to be towards the downside. Let's move on to a daily DAX chart and we can see that we've broken to the downside quite aggressively in the past couple of days and a lot of that has to do with the corporate scandal involving Volkswagen and their defeat device very easy for me to say basically it masks the emissions output from cars under certain testing conditions. Now looking at this DAX chart here I think now that we've broken below the 10,000 level the likelihood is given the potential for this breakout we could well see a retest of the lows that we saw in August but more importantly the trend line support from the 2011 lows that currently comes in around about the same sort of level so while we remain below the 10,100 level on the Germany 30 the German DAX given the concerns about the automotive industry which makes up a good part of that index I think the likelihood is we could well see further losses on the Germany 30 towards the lows that we saw in early August which brings me neatly on to the German automotive sector now I'm looking at the German automotive sector but it's going to be the automotive sector in general that's probably going to feel the rippler effects of this scandal. I'm going to start with BMW Bay Mott work and the preference shares for those this particular stock I'm looking at a weekly chart and we can see from this weekly chart that we have a significant area of support currently coming in around about the 58 euro mark it's also where the 200 week moving average is and it's also where the 2014 lows are as well so from a technical standpoint there's certainly more scope to push lower to revisit the lows that we saw in August and the likelihood is that this downward pressure on German car stocks is likely to continue simply due to a contagion effect as a result of this scandal and I go into a little bit of more detail as to why I think that over the course of this video similar sort of story on Daimler shares this is a daily chart that we're looking at at the moment and again I'm looking at a very very key support level I'm looking at the 2015 lows which is currently held every single attempt to go through it thus far but ultimately the 65 euro level is going to be very very key in the context of further declines if we're able to hold above that then we could get a rebound if we break below that then potentially we're looking towards further losses towards the 60 euro level. Going to finish up with Volkswagen preference shares this is the chart that I think could really dictate where we go to next and certainly the news flow from this particular story is a little bit worrying given the context of where we were at the beginning of 2015. 2015 we're around about 250 euros we've more than halved that move lower so far this year already looking at this weekly chart we can see that we're potentially heading towards the 2011 lows that particular level comes in around about 86 euros currently we're well above that but certainly in the context of how much this scandal could cost VW we're talking in a billions of euros earlier this week we were talking about fines of 18 billion dollars and we were only talking about 400 500 million cars apparently this particular piece of software is on 11 million cars well if you're talking on 18 billion dollars on cars of four or four or 500,000 the US regulator can levy fines of up to 35,000 dollars per car. Exponentially 11 million cars is a hell of a lot more than 400 or 500,000 so VW have already set aside 6.7 billion euros as part of this particular scandal the likelihood is it's going to cost them an awful lot more notwithstanding the reputational damage that's going to cause and notwithstanding the fact asking the questions of the wider automotive sector are our other car manufacturers doing this sort of thing as well so that's certainly something to ponder over the course of the next few days and weeks this particular story has probably got quite a lot more legs in it in the meantime that's it for this week this is Michael Houston talking to you from CMC Markets