While predictions are hazardous in these murky times, there is one I can make with reasonable confidence. At some point - no saying when - there will be a change of sentiment towards equities.

Not necessarily a rise in price, though that might be part of it. Rather, I expect a working through of that revulsion which - in the developed world at any rate - has turned equities into a pariah class.

This has reached an extraordinary pitch. It is one thing for the equity weighting of UK and European pension funds to have slumped from 50 per cent to 30 per cent in the past three years, according to Merrill Lynch. Partly, that will reflect falling market values. But, when we hear that quoted insurance companies have slashed their weighting from 20 per cent to 6 per cent, something else is wrong.

One factor is enemy action from regulators who are penalising long-term investors for holding long-term assets. But that mainly shows regulators to be as susceptible to prevailing

David Fuller's view Either Tony Jackson is right and pension funds are much too cautious regarding equities, or the worst-case economic outlook advocated by some long-standing bears is on its way to being realised.

Since most stock markets had a bad year in 2011, I suggest we look at some of the technical evidence, particularly regarding leaders:

Indonesia's JCI (weekly & daily) has been a frequent leader to the upside for over a decade. Mostly rangebound since 4Q 2010, it has recovered approximately two-thirds of last year's decline. Currently above its 200-day exponential moving average, which has also edged higher in recent months, a decline beneath the mid-December low near 3670 would now be required to question current scope for sideways to higher trading.

The UK's FTSE 100 (weekly & daily) shows a sequence of higher lows since the August to October trough and is back above the MA. The overall pattern shows support building and a break beneath the mid-December low near 5330 would now be necessary to question scope for a test of last year's top area which extends up to just above 6100.

Switzerland's SMI (weekly & daily) also shows higher reaction lows and has broken above its October high, the MA and also the psychological 6000 level today. A close under 5690 would now be required to question the support building hypothesis since August and current scope for a further test of overhead treading.

The Netherlands' AEX (weekly & daily) shows a similar pattern of support building including higher reaction lows, has pushed above its MA and is testing the October high. A close beneath the December low near 290 would be required to question current prospects for sideways to higher ranging.

Sweden's OMX (weekly & daily) has a very similar pattern and therefore outlook to the other European indices above, and has also pushed above its MA. Germany's DAX (weekly & daily) appears capable of following these upward leads - not bad for a region in crisis.

The Euro STOXX Bank SX7E (weekly & daily) is the region's Achilles Heel for equities so it needs to maintain its base building activities near the 2008-2009 trough and eventually sustain a push above 120. Failure to do so would be bearish for the national European stock market indices.

European 'Ted Spread' (weekly & daily) has checked its upside momentum for at least the medium-term, indicating that confidence in interbank lending has improved somewhat since the ECB made its cheap 3-year loans available last month. However, a further pullback well into the September to November trading range extending down towards 0.8 is required to more fully allay concerns.

South Africa's JALSH (weekly & daily) is currently one of the world's firmest stock market in testing its highs extending back to 2008. In doing so it has also consolidated above its MA which is rising once again. A close beneath the mid-December low near 31,525 would be required to question scope for an upward break within the next few weeks.

Brazil's IBOV (weekly & daily) continues to show the best chart pattern among BRICs since it commenced lowering interest rates in midyear 2011. Currently, it is testing its MA and psychological resistance near the 60,000 level. This pattern has base formation characteristics so a close beneath 55,000 would now be necessary to delay significantly short to medium-term scope for an upward break.

Mexico's MEXBOL (weekly & daily) has recovered three-quarters of its decline from last year's January peak and is back above its MA which has also turned upwards. A decline beneath the mid-December low of 35,580 would now be required to delay significantly a test of last year's highs.

The USA's NDX (weekly & daily) has shown relative strength over the last year by remaining in a comparatively narrow range near its highs and it is back above its MA. This large pattern is capable of producing a significant move this year and I would give the upside the benefit of the doubt provided it remains above the mid-December low near 2210.

The USA's SPX (weekly & daily) is another of many indices which have continued to show support building characteristics since the August to October lows. It is also above its MA which has flattened out. Here also, a decline beneath the mid-December low near 1200 is now required to offset short to medium-term scope for a further test of last year's top area.

The USA's S&P 500 Banks (weekly & daily) is the Achilles Heel for Wall Street. While rangebound for an extensive period it is currently above its MA and has just pushed over lateral trading near 130. A decline back beneath 120 would be required to delay significantly sideways to higher scope.

(See also last week's Comments.)