Hello and welcome to CantosCharts. My name is James Hughes from spread betting firm CMC Markets.

Today we're going to look at equity markets and we're going to look at really the broadest index out there, the one that really gives us a road map of where this market is and where it is going to go and that's the S&P 500, the one with the most constituents out there in the US and it's a real barometer of how the equity markets are actually performing at the moment.

Now recently we've spoken a lot about these death crosses, golden crosses and again we're talking about more or less the same thing today. We've seen these moves. We've seen the crosses of these moving averages. In the past they've really resulted into real heavy moves one way or the other, but there is a degree of uncertainty in this market at the moment especially equity markets as we're not getting the performance that we expect.

We've said this over the last couple of days when we were looking at gold and looking at the AUD, looking at the commodity situation.

Now, equity markets are a little bit behind that commodity situation. We've seen this USD strength. We were then looking for the turnaround in commodities which would then lead us to a turnaround in the equity markets and stop this real move to the upside.

But what we're seeing at the moment is a move to the upside which has been criticised a lot of late because there has been a real lack of volume in it. There has been a real lack of volatility in it as well. So it has almost been a climbing of a wall of worry. It's been that situation of if you can't beat them join them. The market is going up bit by bit. We're not seeing 200 point moves on the Dow. We're not seeing 100 point moves in the FTSE. We're not seeing 60 point moves on the S&P. We're just seeing a few points here and there. But relentlessly on a daily basis, just moving higher and moving higher and moving higher.

And that is what this real performance has been since the start of the year. We saw the tail off to start with, but since then and since March we've really seen the markets really start to move higher.

Now, again, we spoke about these crosses in moving averages - this death cross, this golden cross, the 50 day and the 100 day moving average. Now back here we saw that death cross again and of course it resulted in a huge move to the downside bottoming out as we know in March time.

The move higher has come in. We've seen the real strength there. We got the golden cross happening here and the market moved higher. So the next time we were going to see one of those moves (either here or here) we'd be expecting to see the same sort of direction and the same sort of aggressive move in the market. Now we got it. We got it over here. We saw the market dip below.

As soon as we dip below here there is talk of this turnaround. There is talk of this commodity and equity market turnaround. We've seen a lot of fundamental news which really should have been making this market a little bit more negative.

Of course we've had the Greece situation which has been hurting markets. We've had a whole host of other issues which have caused some problems. Not necessarily some more weaker economic numbers, but all of that stuff seems to have turned around a little bit. We've seen the non-farm payrolls really coming in a positive way, the first job growth since December '07, so a real positive move there.

All of this stuff points to yet better economic recovery which in turn should point to that strong USD, weaker equities. But instead we're seeing the performance of jobs are getting better, that's good news for the economy and that is an overall help and push higher in overall sentiment.

We've seen this cross. We've seen it here. We expected to see the turnaround. Straight away we've seen the market bounce back through that again. It shows that we have this uncertain time within this market.

Now, this move to the upside it's uncertain here. We've already discussed. It's this wall of worry. The market is going higher when it shouldn't necessarily be going higher.

We've moved this in a little bit more and what we've got on here are Fibonacci retracement levels from the big down move back to March last year. Now this movement has been pushing higher again as we said and what we've seen of late is a break through the real key upside level at 61.8 per cent. Now that's that real key Fibonacci level on the upside.

We saw it try and test it here which made the level even more important. We came up, tested this level, couldn't do anything there. We frequently pushed above it, but came straight back down and if you look at the sell offs as we went above that, we saw the market go through aggressive sell off. Saw the market go through again, aggressive sell off again. Once again pushed through there, another aggressive sell off.

So that really shows us that that level was not looking to be broken. It was going to take a lot more than just a couple of moves higher or a few little blips above it. It needed something a little bit more substantial, or that was the thought. We got that death cross. We've seen this situation. There is nothing else that really points us anywhere but this more bearish move in equity markets and move to the downside as we've all been anticipating for quite a while.

But what do we see? We see the market push off. If we look at this move here, look how many green candles we've got. A red candle in the middle there, a few more green candles. There are so many green candles there. The markets are going up almost 10, 11 days with one down day in there. The moves aren't huge as we said, but they're big enough to break us through the key 61.8 per cent retracement level from that big down move. We pushed through there and we haven't just pushed through there. We've seen a real big move to the upside.

This has really pushed through a long way. We want to see this continue. Obviously we want to see this upside move and what the big discussion is now, everyone has been saying, well the market shouldn't be reacting in this way, but the big question is now well how should the markets be reacting?

If we go back to March, or the credit crunch and see how markets reacted then, no one expected to see such an aggressive sell off in these markets. Now has that really shifted the overall sentiment of markets? Has it shifted how we should be performing?

Okay, it's a big one that we have to ask ourselves, but who are we to say no it hasn't done? We're seeing these moves when we shouldn't be getting them. These aren't just little moves. Okay, the daily moves may be small, but the growing trend in it and the growing moves are just showing us that at the moment there is no way that these markets look like they want to turn. We should be expecting a turnaround, but we're just not getting it and people are jumping on the bandwagon, moving it higher and while that grows and grows and grows, it's almost that snowball affect again, the market is growing and growing and growing and it's just looking like it is going higher and in a relentless fashion.

This isn't the only index that is doing this. We've seen the likes of the Dow doing it. We've seen the likes of the FTSE 100 doing it. We're seeing all these moves. They're being supported by commodities because we're not seeing a turnaround there and they're being supported by just an overall good feeling that these economies are now getting back to a sense of normality and we're getting them back on track and that's the key point.

So at the moment it's a case of we expect equities to drop but they're just not doing it. So what should we do? Just follow the trend.

Thanks for watching. My name is James Hughes. See you again next time.