 Hello and welcome to CMC Markets on Tuesday the 28th of October and the weekly market update and this week we're going to be disseminating some of the weekend events with respect to the ECB stress test, the effects they've had on the equity markets and also looking a little bit further ahead to the potential ramifications for this week's FOMC meeting, the penultimate FOMC meeting of 2014. Now we've seen a significant bounce back in equity markets over the past couple of weeks. In so much as we've seen the DAX recover back above 9000, we've seen the Italy 40 actually rebound quite strongly as well and we've seen the S&P return back to the levels around about 1,970. So really it's about where can we go to next against a backdrop of an ECB that still remains fairly hamstrung with respect to what it can do to boost the recovery in Europe and the FOMC which still seems likely will end its tapering program at its monthly meeting in October tomorrow on Wednesday. I think it's very unlikely that we will see any change to the timetable outlined by the Fed policy makers earlier this year. I think what we will see is that policy makers will reiterate the guidance that they've been issuing for the past few months, i.e. they will keep rates low for a considerable amount of time. They want to anchor interest rate expectations over the course of the next few months and in that context I think that makes it very, very difficult going forward for equity markets to rally with any degree of what I would call conviction given the very weak backdrop that we're currently seeing play out in Europe. Now for today I'm going to be looking at the German DAX as a follow up to last week's update. I talked about a potential move back above 9000 could actually prompt a break higher. I'm also going to have a look at the Italian 40, the FTSE MIB, the Italy 40 index to see whether or not we can see further gains there. Also going to have a quick look at crude oil and look for the potential of whether or not we could actually see a break lower towards that $75 mark and also look at the potential breakout that I identified in Cable last week. We do appear to be making progress on that and we could actually potentially go as high as $163 or $164. So let's make a start with the German DAX and we're going to look at a daily chart here because I think for the purposes of this presentation it's probably the easiest. We've seen a significant bounce back from the October lows at 8,350. We've pushed back above 9000 but at the moment we're struggling to break back above the 9,120 area. Now that is a 50% retracement from the September highs just below 10,000 to the lows that we saw earlier this month. Just before that also we posted a potentially key reversal day which is essentially a higher high and a lower low. So there is potential as long as we stay below 9,120 for the DAX to rebuff this particular level and head back lower and also looking at the slow stochastic it is starting to embark onto slightly overbought area. It's not just about the DAX though. Let's look at some other European indices to see whether or not we get a similar confirmation on them as well and we do. We get one on the Spanish Ibex 35 and we've also got a key reversal day on the Italy 40 and that's going to be seen by this chart in front of you. Here a very strong negative candle on the Italy 40. We opened higher, we closed below the lows of the previous two days. Now we could get a rebound but as long as we stay below the highs for this week then the potential for a lower Italy 40 remains a very distinct possibility. We've heard an awful lot about the plunging oil price over the past few weeks and the prospect that maybe the OPEC producers could actually intervene and try and underpin prices. Well let's look at the WTI contract because this particular contract does seem to suggest that maybe we could actually push quite a bit lower. At the moment this four hour chart we're trading sideways in a triangular consolidation and the prospect of the sharp move up or down will increase if we break either to the top side or the downside but we need to break out of this triangular consolidation at the moment. Now triangles are generally continuation patterns but trying to preempt a breakout is always a very dangerous thing to do so we wait for the breakout to occur and trade in a direction of the breakout with a very tight stop loss. If we break lower then the potential is for a move towards $75 on a break below $79. So keep an eye on that, it's certainly worth keeping a watch out for. So we're going to finish up with a pound against the dollar. Now you may recall I showed you this chart last week, we've moved on a bit since then, we've been in a descending wedge on this daily candle chart for quite some days now. We do appear to be showing signs of breaking out of it but again it's not really that conclusive. We've broken above $161.50, that's important. We need to stay above $161 for this move to unwind but let's also look at another pattern. Yes we've got a descending wedge but we've potentially got something else. So let's quickly flick from this chart to another daily chart but with a different pattern. Now what does that look like to you? Looks like an inverse head and shoulders. So this inverse head and shoulders if it plays out and stays above the neckline breakout we could well see a significant 325 point move higher from the breakout level which is around about $161.50-60 to around about $164. So certainly we've seen some evidence that the pound could be starting to squeeze those short positions. If this move is sustained we could actually see a significant short position shake out. Okay so that's pretty much it for this week and this month. Thanks very much for listening. This is Michael Houston talking to you from CMC Markets until next week and next month in November.