 Welcome to CMC Markets on Tuesday the 29th of September and the weekly market update. Now I think one of the questions that I commonly get asked when markets are trending strongly one way or the other is whether the trend is going to continue or whether it's going to quickly turn around and reverse and to be quite honest there is no real easy answer to that question. The best thing you can do is trade the price action in front of you. Now the markets I'm going to cover today are not surprisingly going to be equity markets. We are at some very key levels not only in the Nikkei but also in the Hong Kong H shares the German DAX and the UK 100. Now I covered the UK 100 and the Germany 30 the German DAX last week. I make no apologies for going over them again this week because I think they're no less relevant now than they were a week ago. We've seen significant selling pressure over the course of the last few days as well as significant buying interest and these whipsaw these whipsaws that we're seeing in the markets both up and down suggest to me that a market that remains very confused as to what the next move higher or lower will be. The best way to identify trading opportunities is to look at the charts look at the price action and identify key support or resistance levels and then design a risk management program off the back of those levels. Also going to be looking at the dollar yen particularly in the context of this week's non-farm payrolls data that's due out on Friday. Don't forget to sign up for our webinar our monthly webinar which starts at 1.15 on Friday with me and Colin and we'll be going over these key levels revisiting the charts that we visited today and determining whether or not we're going to continue to move higher or whether or not these significant declines could actually run into some significant buying interest and we get a rebound. Now given the concerns about Chinese growth we're going to be focusing on first and foremost Hong Kong 8 shares index as well as the Nikkei 225 because of any potential spillover effects there. We've also got the tank and survey out on Thursday so that could actually play a big part in where the Nikkei goes to next but it's going to start off with Hong Kong 8 shares index and as we can see from this daily chart that you've got in front of you right now we've been in a very clearly defined downtrend since we peaked at the end of May and I've drawn in that line pretty much through the highs through through June through August and through September and we're closing on a key support level which we saw at the beginning of September just above the 9,000 level and also the 2013 lows currently coming in around about 8,650. Now one of the cornerstones of technical analysis is the trend is your friend. What is a downtrend? It's essentially lower highs and lower lows I nearly got that wrong. It's the succession of lower highs and lower lows so this key support level is very very crucial in the context of where we go to next. I'm going to move on to the Japan 225 or the Nikkei 225. Now this is a weekly chart that we're looking at right now and we can see from the weekly chart that this actually looks a fairly orderly market. The intraday moves would suggest otherwise but certainly in the long term we've got a clearly defined up trend that's been in place since the end of 2012. The problem now that we have to decide is to whether or not this long-term uptrend line that we're seeing the market test at the moment is on the verge of breaking. Certainly if we look at the slow stochastic it does look very oversold but don't let that fall you. That doesn't mean that the market can't carry on going down so how the market behaves at this particular level is going to be crucial in the context of where we go to next. If we break lower then we could well see a further move down to 16,380 which was the peaks that we saw at the end of 2013 and towards the end of 2014 so there's a double resistance there. Resistance once it breaks tends to act as support on the way back down so if we break below around about the level that we currently at now around about 17,000 we could well see a move down to 16,380. Going to move on to the German DAX now revisit this chart we looked at it last week it's no less relevant this week the only difference is we're right on that key support level at 9,300. If we manage to post a weekly close this is a weekly chart again if we manage to pose a weekly close below 9,300 then there's a very good chance we could well see a move towards the 200 week moving average and that currently sits at 8,750 so potentially a 600 point move lower on in the event that we do sustain a move below 9,300 at the moment we're finding a significant amount of support at this level and that does make me a little bit cautious that we could actually have the potential to rebound quite strongly and that is why it's very important that you actually keep a very close eye not only on the trend lines but also the previous lows last but not least amongst the indices we're going to look at the UK 100 good support 5,870 also trend line support on the daily charts from the lows in August this 5870 is a very very key support level if we break below that then again potentially we can revisit the lows that we saw in August the pressure is towards the downside but as we've seen in recent days do not underestimate the potential for a short short sharp short squeeze higher so we're going to finish up with Dolly N I think for me this is very very compelling because we've got a whole host of Japanese data out on Thursday and we've got US payrolls data out on Friday now given what Fed officials have been saying about the possibility of a US rate rise I still rule out October irrespective of what Fed policy makers may say or indicate I think at the moment given the concerns that are surrounding the global economy an October rate rise is too soon and I think it's unlikely the Fed will act while we're seeing the amount of volatility that we're currently seeing and let's face it do you think it's likely that the Fed will hike rates at a time when stock markets could potentially be falling further that's the big question so with respect to Dolly N the key resistance levels as indicated by this triangle that I've drawn on this daily chart around about 121 on the top side so a positive US figure could well see a move higher towards 121 a negative US figure we need to sustain a break below 109.2 119.2 if we break below 119.2 then I think there's a significant expectation that we could well test towards 117 and potentially the lows that we saw earlier this year so we got through quite a lot this week make no apologies for that it's very important that you look at the support and resistance levels and the trend lines the long-term and the short-term trend lines for indications of direction just leaves me to say thanks very much for listening don't forget we've got non-farm payrolls on Friday please feel free to sign up for that until then this is Michael Huston talking to you from CMC Markets