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

Today we're going to talk about some of the major indices and most notably we're going to talk about the S&P and the FTSE 100.

Now we're going to start off with the S&P 500. Now we've seen the major indices really top out over the last few weeks or so. We saw real strong gains coming in coinciding with earnings season and stronger recoveries, economic recoveries, going on.

Now, of course, we've seen a little bit of a turnaround in how economic recoveries are looking and seen weakness in the numbers from the US. Seen slight weakness in numbers from the UK and Europe as well and that's really what's starting to turn these indices to the other side.

Now what we've got here is the S&P 500. We've got the 200 day and the 100 day moving averages on here and you can see at the moment that these are really acting as a bit of a channel. Were acting as a strong support and strong resistance on both sides of the market.

Now there is also somewhere else within here that we're looking at and we're looking at this quite closely is we've had what's called a bearish engulfing pattern on the candlestick charts.

Now it's this candle here, the big red candle at the end here. We saw the market start to come up, really try and continue on what we had seen here. We had seen a slight blip and then the market push higher again. But we saw this bearish engulfing pattern where the red candle completely engulfs the previous week before. Now this is a weekly chart, so we've got weekly moving averages and weekly candles. That bearish engulfing pattern is a very bearish signal and as you've seen, the market has started to come down over the last couple of weeks or so.

Of course we've got some key support on the downside that we're going to have to get past. That's the 100 day moving average down here. That's going to be the next level we're looking for. We've already had a couple of tests of this 100 day moving average as the market has been moving along. We haven't seen anything come below it that strong.

Now a lot of people have been talking. Of course we have seen economic recoveries with more stimulus coming in from the Federal Reserve, talks that we're going to get more in the eurozone as well, so it could be a fact that we're going to be in a period of range trading for a lot of these indices bouncing around between strong numbers either side.

It's important that this 100 and 200 week moving averages are going to be the key ones. So this bearish engulfing pattern is likely to move things to the downside around that 1,000 level where a lot of people have been looking for the S&P at the moment and up around 1,200 on the upside. So we're looking in-between those for the range of the next few weeks or so. It's going to take something big in terms of economic recovery or quantitative easing which is either going to push the S&P out of this and if we see a push of the S&P out of this range and see a move either way, it's going to move onto the others.

And we're looking here at the FTSE 100. The FTSE 100 doesn't move of course as much as the S&P and the Dow Jones and some of the more US indices, but the UK will pretty much try and follow suit. But we've got some key levels to look out for here on the FTSE as well.

5,450 is going to be a key level on the upside, resistance level, which has really been capping things since the middle of May. We've seen moves back up to that and again, this is where we've seen the range. The bottom of the range down around 4,800. Now that's the really big range that we're looking at - 5,450 and 4,800. But we've got a minor level in-between and it's 5,160 which is the downside support level. The market again has been bouncing around and if you look at some of the candles within here, this is a daily chart and we've been seeing some big swings in these candles. A big up day, a big up day followed by some real big down days as well. So we're not seeing the market as it was before gradually moving to the upside pretty slowly. We're seeing it with big wide ranges, big wide moves on a daily basis, so that's going to be key to look out for over the next few weeks or so.

Looking at the economic recoveries, looking at any of the data that's going to come out. We've got earnings season out of the way now so we wouldn't necessarily consider that to be something to look forward to. So we're looking at this economic recovery to see if we do see a slight turnaround in those. But if we do, we've got both the S&P and the FTSE 100 range trading and either way we could break out of one of those.

Thanks for watching. My name is James Hughes from spread betting firm CMC Markets. Join us tomorrow; we're going to be talking about the chart on UK gilts.