Eoin Treacy's view Fears for the sustainability of economic growth remain a factor in the USA. Today's weak employment numbers support this view. Tepid demand for Italy's bonds at recent auctions and continued new peaks for Greek yields support the view that the Eurozone's growth slowdown, sovereign debt crisis and weak financial sector are even more of a threat to investor confidence. Asia's leading growth economies are faced with higher wage expectations, the continued strength of essential commodities and the resultant higher inflationary expectations these fuel. Since August 8th and 9th, when the majority of indices found at least short-term support, three quite different rallies have taken place.

1. Markets such as the Nasdaq-100, the S&P/ASX200 and Brazil exhibited widely varying performances prior to the late July declines but their subsequent rallies share a number of characteristics. All three found support on August 8th, rallied from above that low on a pullback approximately 10 days later and have since advanced to test the lower side of their overhead top formations.

Compared to the Dow Jones Industrials Average and the S&P500, the Nasdaq-100 has so far posted a comparatively shallow reaction and bounced back above the 2200 level quite quickly. It encountered at least short-term resistance in the region of the 200-day MA this week and a sustained move back above 2300 would be required to question continued potential for medium-term top formation completion.

The S&P/ASX 200 has been ranging, in local currency terms, for much of the last two years. It broke downwards a month ago and has returned to test the lower side of the overhead range. A sustained move back above 4500 will be required to question medium-term scope for additional downside.

Brazil bounced emphatically from the 50,000 area and yesterday's interest rate cut fuelled rally took the Index back within striking distance of the lower side of the overhead top formation near 60,000. A sustained move back above that area, held for more than a few weeks, will be required to question medium-term Type-3 top formation completion.

South Africa, New Zealand and Mexico share some of the above characteristics.

2. Markets such as the S&P 500, FTSE-100 & Swiss Market Index all also found support on August 8th. They rallied somewhat, found support above the lows and subsequently posted new short-term highs. On a very short-term basis these could be considered the foundations of an uptrend. However when one inspects this action from a medium-term perspective, it could also be construed as ranging below Type-3 top formations, which could also be classified as distribution.

The S&P500 will need to hold above the August 22nd low at 1121 to retain the very short-term progression of higher reaction lows. A sustained move back above 1300 will be required to question medium-term type-3 top formation characteristics.

The FTSE-100 will need to hold above the August 19th low at 4930 if the short-term bullish outlook is to be maintained. However, a sustained move above 5800 will be needed to question the medium-term bearish hypothesis.

The SMI has a very similar pattern over the last month, with a short-term higher reaction low near 5000, but a sustained move above 6250 is required to question the medium-term downtrend.

South Korea and the Hang Seng share some of the above characteristics.

3. A number of markets such as Germany, Singapore and Sweden also found support on August 8th or 9th but subsequently fell to post a lower low by August 19th and have subsequently failed to rally convincingly. The conditions for a short-term uptrend are not present in these markets and the best that can be said is that the downtrend has lost momentum.

While overextended relative to the 200-day MA, the DAX will need to sustain a move above 6100 to break the progression of lower rally highs and defray current scope for additional downside. Over the medium-term, a sustained move above 7000 will be required to question the consistency of the downtrend.

Singapore rallied reasonably well from its August 22nd low but the progression of lower highs remains intact. A sustained move back above 3150 would be required to question medium-term scope for additional downside. Sweden has a similar pattern with a sustained move back above 1100 required to question the medium-term downtrend.

The Euro Stoxx Banks Index, FTSE-350 Banks Index, S&P500 Banks Index, India, Taiwan and Malaysia also share some of these characteristics.

Indonesia and the Philippines are the only two markets I can think of which have not fallen below their respective 200-day MAs. They remain within the confines of consistent medium-term uptrends and would need to sustain moves below their August lows to signal supply dominance. They are unlikely to remain immune if global stock markets continue to decline but are worth monitoring because they have been leaders for almost three years and should be among the first to bottom.

Interest rates in the USA, Eurozone, UK and Japan are already close to historic lows. Asia's other major economies have not, yet, signalled they are about to begin easing policy. China raised the reserve requirements for its banks again only last week. There has been a great deal of speculation about the potential for a fresh round of quantitative easing. The worse the news becomes, the greater the potential for such an outcome. However, long-dated government bond yields are already quite low. Additional purchases by the Fed could succeed in effecting an additional decline but this has not proved sufficient to foster growth on the two previous occasions. Lowering the deposit rate paid on funds held by the Fed could encourage banks to lend but this is as yet an untried policy alternative. Next week's address by President Obama to the houses of Congress has the potential to lift sentiment somewhat but substantial structural reform will have to be enacted to change the fundamental environment.

The spread between 3-month Euro Libor and Euro 3-month generic government bonds completed a two-year base at the end of the July and continues to extend the advance. A clear downward dynamic would be required suggest a diminishing risk premium attached to the Eurozone's banking sector.

US 30-year yields fell back to test the August 18th lows near 3.3% today. This area offered support last year but a sustained move above 3.7% will be required to break the progression of lower rally highs and signal a return to supply dominance beyond the very short term.

Brent crude prices have posted an incremental progression of lower rally highs since April but have still been above $100 for considerably longer than in 2008. Prices pulled back slightly today but a sustained move below $105 will be required to check the short-term advance. A decline below $100 held for more than a week or two would be needed to confirm medium-term top formation development.

Gold rallied impressively today to come within $40 of the all time peak, set on August 23rd. It is still overextended relative to the 200-day MA but is benefitting from its status as a safe haven.

The Dollar Index is rallying from the lower side of its four-month range and a sustained move below 74 would be required to question scope for some additional upside.