Investors continue to have faith that the US ultimately tackles its structural deficit problems. This issue has been postponed until after the 2012 elections, and the lack of budget cuts in 2012 should allow economic growth to continue. Should investors lose faith and become persistent sellers of US bonds, then the Fed will be forced to increase its bond purchases or allow higher long-term rates. This will become a bigger issue as the elections get closer.

David Fuller's view "Faith" in any market is inevitably based partially on relative comparisons. The US government deficit has moved off centre stage and into the theatre wings since investors became transfixed by Europe's Rocky Horror Show. And China's long downtrend has weighed on Asia's ratings.

Europe's sovereign debt problems will not be resolved a year from now but, hopefully, they will be somewhat less of a global and even regional concern than we see today. However, Asia's market fortunes are likely to improve much more quickly as monetary policy in the region becomes more accommodative, provided the price of crude oil (weekly & daily) does not spike higher anytime soon.

China (weekly & daily) looks oversold and undervalued, as I have said before and today's upward dynamic has checked the slide at least temporarily. Similar action did not produce more than a brief technical rally in October but China is lower today and it looks as if monetary policy will become a little more accommodative. A technical rally which holds, providing evidence of support building rather than just short covering, is required to improve the medium to longer-term outlook.

ASEAN's emerging markets remain steady as they approach last year's highs as you can see from these charts for Indonesia (weekly & daily), Malaysia (weekly & daily), Thailand (weekly & daily) and particularly The Philippines (weekly & daily). They have generally been upside leaders for over a decade and breaks back beneath the mid-December lows would be required to offset the current upward bias.