Last Friday I shared some thoughts regarding the potential turn in the US Treasury bond market. As many markets are correlated, it would be worth looking for reversal signs in other markets. And in fact, I believe such signs are in place in the S&P 500.
See the chart below. We see a bullish engulfing pattern and a volume spike, which signals to me potential exhaustion of the upwards trend.
Also worth noting is the divergence between emerging market stocks and the S&P 500; emerging market equities have already turned, as the chart below illustrates. (via ZeroHedge)
Lastly, I think it is worth mentioning that we are still in the vicinity of the potential long-term megaphone pattern.
What do you think?