Eoin Treacy's view We are at an interesting juncture in the equity markets. The S&P500 dropped to within 30 points of its 200-day MA last week. This closed the majority of its overextension, which at its widest on June 21st was 205 points or 13% . An impressive rebound has taken place over the last 10 sessions and the short-term progression of lower rally highs is now being tested. So what next?

Considering the scale of the rally that saw the Index push to all-time highs and so far sustain the majority of the advance, and the size of the pullback relative to those posted in the last year, the most likely scenario is that the Index spends more time consolidating the earlier gain which is likely to involve a good deal of ranging.

The outlook for the Fed's tapering is likely to have a significant effect on how equity markets perform. If it goes ahead as planned and coincides with the introduction of some of the Affordable Care Act's key provisions, the trend in liquidity provision will have turned and this is likely to weigh on leveraged players. At the present time this is still the most likely scenario; suggesting that even though we have had a rebound, the potential for a deeper reaction cannot be ruled out.

With the slowdown in the global economy, the Fed's tapering, the Egyptian coup, potential recession in Brazil and oil prices which are breaking upwards, there are still a small number of companies that are hitting new highs. To find them, I performed a High/Low Filter of the S&P 500 Index's constituents. Here is a list of the results. Those most likely to sustain these gains are likely to have some specific attribute that shields them from the above concerns.

For example US health insurers such as Cigna stand to benefit from the Affordable Care Act's introduction and continue to trend higher. Starbucks is benefitting from lower coffee prices and the pick-up in the US economy. O'Reilly Automotive continues to benefit from demand for auto-parts in preference to new cars. Amazon has one of the least volatile uptrends as it consolidates above its 200-day MA. In the generic pharmaceuticals sector, Perrigo completed a yearlong range this week. The financial sector is also worthy of mention with Wells Fargo posting new closing highs and Visa continuing to extend its already highly impressive uptrend.

While this is not an environment which is conducive to chasing rallies, some of these companies are likely to be among the leaders once this corrective phase has runs its course.