Time for a quick update for what the technical charts show. As I pointed out 2 weeks ago, the stock markets were beginning to peak. While the US stock market has overall performed well and recovered to the highs of April, the emerging markets really never recovered. Many only retraced 50% of the April peak.
As you can see here, two weeks later, the peak timing was accurately called. The emerging markets have definitely reversed its momentum and has dropped almost 4%.
For the S&P 500, the current peak occurred just a couple of days after my call. However, calling peaks on the exact day is generally more coincidence than skill but regardless, the market indicators were showing slowing momentum and potential reversals incoming which is what has happened over the last 2 weeks.
So the million dollar question: where will the market go next? Normally, indicators would say there's still room for the market to drop as momentum has only recently turned negative. However...the anticipated Fed intervention and ECB intervention and potential Euro bailout relief all play a huge role in where the market will go. Right now, the answer to that question relies solely on the policies that will be announced over the next week or two... Hold onto your hats!