 Hello and welcome to CMC Markets on Monday the 8th of August and this quick look at the markets and I'm going to be paying particular attention today in the wake of that very decent payrolls number that we saw on Friday to crude oil prices. Now US oil prices have been giving us somewhat mixed signals over the past couple of weeks we've seen gasoline inventories remain fairly high still at five year highs despite the fact that the US driving season is starting to come to an end that usually starts to end around about the end of August beginning of September but we've also got the fact that there is a story out this morning that OPEC members are considering discussing a production freeze at the next OPEC meeting in Algiers which is due in September. Now we've been down this particular road before with respect to crude oil prices and certainly I think if you look at the figures for Chinese demand that does appear to be still fairly robust but when you actually look at net Chinese imports they are still very disappointing which suggests to me that maybe China is taking advantage of the cheap oil prices that we saw in the middle of last week and is building up its inventory while prices are fairly low. If we look at this chart here from the June highs we've come off quite quite a bit around about 20% so on that basis and the fact that we weren't able to sustain and move below the 200-day moving average and in the process of posted a potentially bullish daily reversal that does appear to suggest that maybe for all the bearish bets in crude oil prices would you a little bit of a correction and certainly I think the first obstacle to the current correction at the moment given the fact that we look as if we're going to close higher for the fourth day in a row is this resistance area here around about $45 and $50 $45 and $50 a barrel and this is for Brent prices we're also in the overall downtrend that we've been in since we peaked in June so we can still potentially remain in this particular downtrend and still go back to around about 46 or 47 dollars a barrel without undermining the overall negative outlook for crude oil. It's a similar sort of story when we actually look at the WTI chart and you have to remember these these these particular markets correlate very very well. We look at the lows earlier this year from $25 a barrel on US West Texas and the peaks that we saw around about $51 a barrel in June posted a potential tweezer bottom we retraced almost 50% of that entire up move finding support just above around about just above $38 and $50 a barrel and about $39 a barrel posted a tweezer bottom a bullish engulfing day and now look as if we could well push higher towards again here $44 a barrel which again was the early July lows that we saw in the first few trading days of July. If we change this also to a weekly chart and then zoom it right in we can argue that there's a potential hammer on the weekly chart as well so certainly in the context of the price action that we've seen over the past few days in the past few weeks this could be a painful few days for any stale short positions out there. Again similar sort of story with respect to the daily chart here we can go all the way back potentially to around about 45 or 46 dollars a barrel without actually undermining the downward trajectory that we've been in over the past few days furthermore both oscillators on the WTI and the Brentshire are starting to gain a little bit of momentum which does suggest that potentially any further downside could be fairly limited and any pullbacks are likely to be limited here in this case to around about $41 a barrel. So that's it for today thanks very much for listening this is Michael Houston talking to you from CMC