 Hello and welcome to CMC Markets on Tuesday the 13th of October and the weekly market update and I take one week off and what happens equity markets go surging higher. Unfortunately I think it appears they've run into a little bit of a resistance but first and foremost we need to address why equity markets rebounded the way that they did. And I think a lot of that was to do with the fact that China was off, so the focus was off China, the focus is now back on it hence the fact that we're seeing a little bit of weakness. But overall the surge that we saw last week I think was largely a byproduct of a very oversold market and a little bit, I think a little bit of dovishness out of the Fed with respect to those minutes and an overall slightly more positive outlook for equity markets in general. We also saw oil prices rebound quite sharply on an expectation that some of the US production cuts could actually feed into a slightly tighter supply. However both of those narratives from last week appear to have come to an end and ultimately we need to decide where the markets are going to go to next. So I'm going to look at the US S&P 500, I'm going to look at the FTSE 100 and the German DAX and the key resistance levels there and why they stopped where they did with respect to the rally of the last eight to nine days. And also look at oil prices and see whether or not there's any scope for them to push higher or whether or not we've seen again the highs there and could we'll see the drift back lower. So the debate continues about whether or not the Federal Reserve is likely to raise rates sometime this year. We've got a number of different Fed policy makers sending conflicting statements about the possibility of a rate rise in December or a rate rise in 2016. Be that is it may this week's economic data out of the US could well be a key determinant and whether or not we get a rate rise this year. Namely we've got the US based book, we've got US retail sales, we've got US fully fed and empire manufacturing both of which contracted last month. And while last week's FOMC minutes were dovish and sent the S&P up to its highest levels in about three or four weeks they nonetheless failed to overcome a significant resistance level which I'm about to show you on this six month daily chart in front of you right now. Now CS&P 500 it's also the 2020 level and what I've done with this is I've taken the May highs and I've projected a number of Fibonacci retracements off the August lows. Now I've taken out all of the ones that aren't relevant and just focused on the 61.8% Fibonacci retracement level which currently coincides with the September highs and where we stopped earlier. This week 2020 2025 that's going to be a very key level also note that the slope slow stochastic is very overbought and is showing some signs of potentially rolling over. So we've looked at the S&P 500, saw a similar rebound in the FTSE 100 the UK 100 but it's notable that the snapback that we saw in the FTSE 100 has been nowhere near as sharp as we saw in the S&P but nevertheless we have respected an important Fibonacci retracement level. Again what I've done here is I've taken the all-time highs earlier this year and I've projected it off the lows that we saw in August and here we've retraced 50% of the entire down move from the all-time highs above 7000. So again we've respected a significant Fibonacci retracement level but also it coincides with the July lows so we can see from here that the 6450 level on the FTSE 100 is a very key resistance level on the upside. So as with the S&P at 2025 as with the UK 100 at 6450 any further upside progress needs to push through those resistance levels otherwise there is a strong risk that we could well start to turn back lower again. I'm going to finish up with the Germany 30 and the weakest rebound of them all. We've looked at the S&P, we've looked at the UK 100, the Germany 30 again have done a similar sort of thing here. Taken the all-time highs in April, projected Fibonacci retracements off the lows that we saw in September in this case we made a marginal new low from the August lows but nonetheless potential double bottom there but we haven't got anywhere near the September highs and that is a particular worry for the DAX because I think of all the markets you would have expected that index to really be the key barometer for European equity markets in general. And the rally there has been very very feeble. We haven't even got as far back as the 38.2% retracement level and the September highs. So that's a significant worry and that really does put us at risk of a retest of the long term trend line support from the 2011 lows which is the red line on the bottom. Also note as in the case of the previous two charts that the oscillator is starting to turn over and if that occurs then we could well see further weakness across all of those markets. It wasn't any coincidence last week that where in equity markets rallied commodity prices rallied as well and that's no better reflected than here in oil prices. Now we're going to start off with Brent crude prices because we saw a significant rebound there but ultimately we failed to take out the August highs for the Brent crude rally and that has capped the top side. But even if we do break through those September highs we've still got the 200 day moving average which could well act as resistance in the short to medium term. Similar sort of story on the oscillators. There is some evidence of waning momentum and if we look at the US prices it's a similar sort of story. The difference here is that we did take out the August September highs but we weren't able to take out the 200 day moving average. And if we look at the 200 day moving average that also capped the rally in the middle of June. So that's going to be a very key resistance level for crude oil prices. So if we look across asset classes if we look at Brent crude if we look at WTI we look at the Germany 30 the S&P and the FTSE 100 they all need to break through these key resistance levels to argue for further gains in equity markets. Otherwise we could well be at further risk of range trading and a retest of the lows. So that's it for this week. Once again thanks very much for listening. This is Michael Houston talking to you from CMC Markets.