Hello and welcome to CantosCharts Masterclass. I'm Sandy Jadeja, Chief Technical Analyst for City Index.

Well of course the markets have been taking a major decline and that's why it's important to stay tuned to Cantos because we can give you alerts up ahead and so today I want to talk a little bit about using technical analysis and of course, what's ahead in the markets. But as always, this is simply for information and educational purposes only.

So we'll take a look at the current markets. I'm going to keep this fairly short and sharp, so I'll give you the very key levels to watch out for.

Now this is the FTSE100. Now we know that the market has taken a steep decline. In the previous videos we've discussed about the key resistance levels and as I said, watch out for very specific patterns which would enable us to pick turning points in the market.

This is the monthly chart. So this is the much larger picture and of course we haven't broken above the all-time high here. We have made a high in February and since then we were pretty much going sideways in a choppy range.

But the first thing you'll notice is that the market is now back below its 20-period moving average and this is something that short-term traders keep an eye on. But also you'll notice that momentum has also now turned down on the monthly chart, so this is indicating that for the intermediate term trend, this is looking bearish.

If we move onto the weekly chart we can see straight away that we previously discussed that 6,050 would be a resistance level to watch out for. That's not to say that the market was definitely going to turn. It's just an area that we would watch for possibilities or further clues for a downturn.

Now straight away there were several weeks, we had four attempts to break above that level and usually you would get three attempts which is referred to as a triple top, but in this case we had four attempts and that's telling us there is weakness.

So again on the weekly chart we notice that the market is below its 20 period moving average, but also notice that the momentum index was showing lower highs. So as this was making significant highs at the 6,050 level technical indicators were suggesting that it's getting weaker and weaker and weaker. So there was a clue there saying that there is possibly a turn coming towards the downside.

Now, at the moment, the 6,050 still stands as a very key resistance level, but on the downside I'm looking at 5,090 and below that we have 4,780. Bearing in mind that this intermediate term trend has changed, that 4,780 looks like it is a long way off, but when markets thrust towards the downside, they can very quickly be reached.

Now also, in terms of candlesticks patterns, this is something we focus on quite regularly here at Cantos, we pointed out there is a spinning top pattern previously and if the market breaks below that low, the stop would have been above the high and of course what's happened is the market has broken below that low.

This was followed by a bearish engulfing pattern and then of course this big move towards the downside.

So that 5,090 is, in my view, the first stop for the FTSE. We will probably get a bounce around that area there and, in terms of patterns, there is something else which is also out. But also notice that the parabolic indicator had been violated towards the downside. That's another clue suggesting that this market is still bearish.

Now this other pattern that I'm talking about, we've seen this move towards the downside labelled as wave one and then a move back towards the upside which is a retracement and that's wave two. This is clearly a wave three on a daily chart which is telling us basically that there will be a move coming towards the upside, but that will probably be short lived and that will be wave four followed by wave five to the lower side in terms of support.

So again, watch out for these numbers, 5,090, 4,780 as an extreme and pretty much I think we are now heading into a bear market because the monthly chart, the weekly charts and of course the daily charts are all looking very, very bearish.

So stay tuned to Cantos because we will keep you updated on a weekly basis as to what's happening in these markets.

So always use the intermediate term timeframe to suggest what the longer term trend is suggesting and of course the monthly and the weekly is bearish and then the indicators, are they bullish or bearish on the lower term timeframes? We of course use the momentum index and wait for clear reversal signals and we use the parabolic indicator as well as the candlesticks for this and of course, maintain protective stops. Right now the volatility is high. You could quite easily get whip-sawed both to the upside and to the downside.

I hope this report has been useful to you in obviously very dire times, but stay tuned to Cantos and I look forward to seeing you in the next report. Have a safe trading week.