Eoin Treacy's view The easy answer to this question is it depends on which market you are talking about. April 2010 marked a six-month peak for Wall Street and much of Europe. What had started out as a promising year quickly turned to disappointment as indices moved into lengthy ranges. ASEAN markets, such as Indonesia, pulled back towards their moving averages, quickly found support and had mostly reasserted their uptrends by June. For these markets 2010 was a year of stellar gains.

Turn the clock forward to November and most ASEAN markets had become really quite overextended relative to their 200-day MAs. Wall Street and much of Europe were coming to the end of lengthy consolidations. Since then Wall Street has outperformed impressively while most ASEAN markets are in varying stages of mean reversion towards their respective 200-day MAs.

So what's next?

The tantalisingly simple approach would now be to assume that another switch is about to take place which sees ASEAN markets outperform spectacularly for the next six months. However, two important factors are different on this occasion and are worth considering

Oil prices are significantly higher and have a more profound effect on emerging economies that spend a higher percentage of their income on commodities. While the threat to Middle Eastern oil supply has stabilised somewhat over the last two days, prices are still in the region of $100 and considerable uncertainty remains.

In addition, monetary conditions remain very accommodative in most of the world. Central banks, particularly in North American and Europe, have been procrastinating on raising rates because of the continued fragility of economic expansion. However, while a corrective phase on Wall Street might delay movement on this front, it is only a matter of time before interest rates start to rise. Continued inflationary pressures stemming from high commodities prices only increase the chances of rate hikes later this year.

My gut instinct tells me that the current reaction on Wall Street is unlikely to remain as shallow as that posted in November, primarily because indices are at higher levels, more overextended relative to 200-day MAs and investor anxiety has been stoked by the surge in oil prices.

A number of Asian markets appear to be finding support in the region of their 200-day MAs having already completed reversions. Just how high oil prices move is likely to be a large determinant in how well they hold the consistency of their medium-term uptrends and how quickly they rally back towards their November highs.