Weekend comments of most traders have been focussed on - "Break out" or "Bull Trap" ? Different markets performed differently in 2005, but equities as an asset class have always been highly correlated. It is extremely unlikely that one set of equity markets will turn around and plummet, while the others carry on their merry ways. A small consolidation is part of all Bull Markets - but a "fake out" implies a trap and a major trend change. So is this "break out" or "fake out" question valid for most markets? A closer examination shows that barring USD (and USD rates) related markets, the issue is irrelevant elsewhere. It seems that Fed hikes and the rising Dollar were the problem for stocks in 2005 - not Oil prices, Global slowdown and other much touted reasons which should have affected everybody. So, can all these markets suddenly turn around and collapse? Sure, they can - anything is possible in markets. But is there any reason to expect it today or tomorrow? If not, then maybe the breakouts in the US Indices are valid as well - they are probably just pricing the Fed out of the way. Charts & Comments at http://eagletrader.blogspot.com/2006/01/fed-was-problem-for-stocks-in-2005.html