Hello and welcome to CantosCharts. My name is Michael Hewson from spread betting firm CMC Markets.

Today I'm going to look at the key equity markets and where I think they could possibly go over the next few days and weeks.

Now you may recall yesterday I talked about the Reuters CRB and how, when you look at the Reuters CRB in the context of what equity markets have done over the past 12 months to 18 months, they have performed in a quite similar way in they've tracked each other quite closely.

Now I identified a possible reversal pattern in the CRB and that could have a negative effect on equity markets, so I'm going to start with the S&P 500.

Now if we can see over the last two to three years, since we've put in those lows around 660, 666.8, the S&P 500 has traded progressively higher until it posted this bearish engulfing pattern at the beginning of 2010 (it was around about February/March 2010) and then significantly pushed lower.

Now what has happened here is you may notice the 200 day moving average on here. That's quite significant. We've broken below that and we've broken below that in line with the Reuters CRB and other commodity indexes as well. Crude oil significantly is also below its 200 day moving average.

But what it needs to do is, we need to stay below the 200 day moving average on the S&P 500. The value for that currently is 1,108 and as long as we can stay below that and we don't close above it, then we could still see further equity market weakness on the S&P 500 going forward. We also have a significant support line around these lows here at 1,020/1,030.

Moving onto the Dow Jones and you can see the shape of the chart is fairly similar. Again, the 200 day moving average, we've closed below it. Again, we had a bearish engulfing pattern down here and again we've got a series of lows around about 9,800.

So again, the same argument applies. While the Reuters CRB remains under pressure, I expect equity markets to remain under pressure, so the correlation should remain.

So again with the 200 day moving average, the value of the 200 day moving average is around about 10,313 on the Dow Jones. As long as we don't close above that, then I suspect that we will see, or continue to see, further equity market weakness.

Now let's move onto the FTSE 100. Now the FTSE 100 is very heavily weighted in commodities, specifically mining stocks and oil stocks. So it's much more susceptible to commodity price swings than say the S&P and the Dow Jones is. In fact, for me the S&P 500 is probably a more significant barometer of US equity prices than the Dow Jones because it's a much broader equity base in terms of the number of stocks within it.

So again, we've got the 200 day moving average. We crossed below it and closed below it. The value of the 200 day moving average is 5,325 on the FTSE 100. Again, we've got a series of lows around about 5,000 (4,950), so we need to basically close below those levels for further equity market weakness to unfold. But while we stay below the 200 day moving average, I am still bearish on the FTSE 100 while the Reuters CRB remains weak.

So that's the broad outlook for US and UK benchmark indexes in relation to yesterday's commentary on the Reuters CRB. Hope you found it interesting.

My name is Michael Hewson, CMC Markets. This is CantosCharts.