"While everybody is focused on riots in the "large open air museum" that is Greece, the great hope for the Universe - China and India - look to be stumbling badly. Could these countries that are in a double digit decline soon be victims of a rout now that everybody who wanted to buy is fully invested and losing their shirt?

"A respected technical analyst, Louise Yamada recently proclaimed that the Indian market is now in a structural breakdown of long term significance. I have nothing to add, except that the last time I kept the rose colored glasses on too long I was humbled by how much even great companies suffer when their is a global margin call."

David Fuller's view Interesting points. There has been a significant amount of deleveraging in recent months and sentiment inevitably becomes more bearish as a corrective phase continues, not unlike what we saw during last year's correction.

Among major markets, India and China have been leaders on the downside this year and I do not think that sentiment will improve significantly until these countries shift their monetary policy from tightening to at least a neutral stance.

There are indications that this will occur before long, in line with a setback in commodity prices and slower GDP growth induced by both countries to lower inflationary pressures. See India Signals Slower Pace of Rate Rises on Global Economic Risks, posted last Thursday, and the comments on China by Wendy Liu in the interview posted yesterday.

Technically, breaks in the progressions of lower rally highs for the two indices above will be required to confirm more than technical rallies within the current downward trends.