Interest rates also made an upside breakout last week. After 19 weeks of ranging between 1.8% and 2.1%, the 10-year Treasury yield rose to 2.3%, the first time it has been above its 200-day moving average since early July 2011. The rise in yields was driven by several factors, including the successful results from the Fed's stress test for banks, a widespread increase in US retail sales, and a bigger-than-expected drop in unemployment insurance claims. Our initial technical target for 10-year Treasury yields is 2.5%, but we could easily see them rise to 3% if positive economic data continues and inflation expectations creep higher. Following our February sale of long-term Treasuries - held as a potential hedge to help protect against a Lehman-like, systemic collapse in the European financial system - our portfolios currently have no exposure.

David Fuller's view I also agree that even the most conservative investors do not need any hedge exposure to Treasuries at this time. A slight pullback in yields during a consolidation prior to higher levels would afford an additional opportunity to reduce any remaining exposure in this sector. High-yielding equities, preferably among successful multinational Autonomies, are a far better investment.

That said, price charts show further evidence that upside momentum is waning for most stock markets. They remain susceptible to additional reactions and consolidations in coming weeks, in response to the strong gains seen since mid-December. Thereafter, this pause should help to support a resumption of the cyclical bull market.