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So - What Happened?

Wall Street finished the week with deep losses as market participants fled the stock markets under trading volumes that were significantly higher than their 30-day averages. Most market strategists blame this broadly placed market rout on a selloff in emerging markets assets, which apparently was triggered by the Fed's efforts to taper its QE programs. It reduces incrementally the easy-money flow that had boosted these higher-yielding assets in the past.

This is why the Fed's QE efforts were nixed, because liquidity flowed to where it was not supposed to. But now that this easy-money spigot is being tapered, emerging market equity funds domiciled in the U.S. are pulling out from these markets in a hurry. This scrambling out from emerging markets assets accelerated last Thursday and Friday, triggering the worst week for the global equity markets so far this year. Meanwhile, investors are once again rushing to safe-haven assets like U.S. Treasuries and commodities, especially gold.

But there is something else at play here as well. For weeks, the major indexes were soaring to higher highs while their respective MACD momentum bars were fading away. It meant that the equity market was flying on nothing more but the "fumes of an empty gas tank" and last week's selloff was the result of that.

So now, investors are realizing that the Fed's tapering effort is on for real and that from now on it's "swim or sink" time for the market. But most market participants seem to doubt the market to be strong enough to swim on its own without the lift of a QE life jacket supplied by the Fed.

But let's check the Troika charts, and see if the market still has a chance to scale higher highs.

Note that the bull components of this Troika [SPX] and [SPXL] show their respective indexes in a steep nosedive. Accelerating this dive are their MACD momentum indexes which appear to be sliding deeper into bearish territories. Not to be outdone, the RSI strength indicators of these two indexes are also slipping deeper into their bearish spaces.

All of this suggests that the market will test lower lows in order to find renewed traction to the upside. But for as long as the Moving Average configurations keep a bullish stance [green line below the red line] there won't be a full-fledged correction in sight.

Check the Troika's bear component [SPXS] and note that even though this index surged out of a deep hole at the bottom of a deep pit, this bear is still in the pit. For as long as its MA lines configuration stays bearish [green line above the red] this bear hasn't got a chance to claw the market down in a steep and prolonged correction.

The fundamentals out there are also favoring the bulls. There is no doubt that the economy is improving, and that there is still plenty of cash at the sidelines, waiting for the market to come down far enough to enter this game.

Add to this that more cash is coming back from the emerging markets, looking for investment opportunities on Wall Street. So there is plenty of fuel waiting to fill the markets' gas tanks for flights to higher highs.

So all in all, this Troika remains bullish and consequently, dittos the market.

Check these vital mid-cap components of the market, [MIDU] for the bull and [MIDZ] for the bear. For as long as the bull's MA lines configuration stays bullish [green line below the red] and the bear's MA lines configuration stays bearish [green line above the red] the market's bias remains geared to the upside.

The small-caps [SML] were leading this rally to higher highs and they will do so again as long as the MA lines configuration of this index stays bullish [green line below the red.]

This NASDAQ 100 index [NDX] also did a bit of a nosedive in sympathy with the general market's decline. But this tech-laden sector will remain bullish for as long as its MA lines configuration remains positive [green line below the red.]

This X vs. X index will decline when it senses a market rally in the making, and will rise when it senses further market declines ahead, as is the case now. But for as long as its MA lines configuration stays bearish with the green line above the red, this market remains bullish.

This [CRB] commodity producers' index reflects investors' flight to safety into commodities, especially metals. For now, the MA lines configuration of the CRB is still bullish [green line below the red,] but not by much. Should this configuration turn bearish with the green line above the red, expect the commodity market to sink sharply lower.

Check the [BDI] commodity demand index and note its sharp decline due to China's contraction in its demand for commodities. The MA lines configuration of this index is turning bearish again [green line above the red,] a sign that the commodity market is in trouble.

[GOLD] had itself a nice little rally due to investors' anxiety for safety. The momentum bars of this gold index are solid in bullish territory and so is the RSI strength indicator. Still, until the MA lines configuration for gold turns solidly bullish [green line below the red] the bias of the yellow metal remains to the downside.

Oil [WTIC] is somewhat benefiting from investors' flight to safety as well as increased demand due to cold weather. But with its MA lines configuration turning bearish [green line above the red] oil could well reverse direction to the downside again.

Just in case anyone wonders who's in charge in Wall Street, this [Bull%] index has the answer. But even though the short ETFs have the upper hand in a trade right now, it is not a strong hand and so it is best to stay in cash a while longer and see how things develop in the markets. According to these charts, the bull stands by to break out to the upside and that's where the opportunities lie.

Here are some favoured Leveraged Bull ETFs to keep track of:

Junior Gold Miners 3x (NYSEARCA:JNUG), Gold Miners 3x (NYSEARCA:NUGT), Nat Gas 2x (NYSEARCA:BOIL),

DOW 30, 2x (NYSEARCA:DDM), Gold 2x (NYSEARCA:DGP), Real Estate 3x (NYSEARCA:DRN), Energy 3x (NYSEARCA:ERX),

Financials 3x (NYSEARCA:FAS), Mid Caps 2x (NYSEARCA:MVV), NASDAQ 100, 2x (NYSEARCA:QLD), Russell 2000, 3x (NYSEARCA:TNA),

S&P 500, 3x (NYSEARCA:SPXL), NASDAQ 100, 3x (NASDAQ:TQQQ), Regional Banking 2x (NYSEARCA:KRE),

Nat Gas 3x (NYSEARCA:UGAZ), S&P 500 3x (NYSEARCA:UPRO), Silver 3x (NASDAQ:USLV), Health Care 3x (NYSEARCA:CURE),

Semis 3x (NYSEARCA:SOXL), Technology 3x (NYSEARCA:TECL), Mid Caps 3x (NYSEARCA:MIDU), DOW 30, 3x (NYSEARCA:UDOW),

Materials 2x (NYSEARCA:UYM), Financials 2x (NYSEARCA:UYG), Biotech 2x (NASDAQ:BIB).

Non-Leveraged Long ETFs:

Biotech (NYSEARCA:XBI), Biotech (NYSE:PBE), Biotech (NYSEARCA:FBT), Biotech (NYSEARCA:BBH), Biotech (NASDAQ:IBB),

Discretionary (NYSEARCA:FXD), Health Care (NYSEARCA:FXH), Industrials (NYSEARCA:FXR), Pharma (NYSE:PJP),

Small Caps (NASDAQ:PSCT), S C Momentum (NASDAQ:DWAS), Banks (NYSEARCA:KBE), Capital Markets (NYSEARCA:KCE),

Regional Banking (KRE), Transports (NYSEARCA:XTN), Financials (NYSEARCA:FXO), Materials (NYSEARCA:FXZ)

Mid Caps (NASDAQ:FNX), Semis (NYSEARCA:SMH).

Leveraged Bear ETFs:

Emerging Markets 2x (NYSE:EEV), Oil & Gas 2x (NYSEARCA:DUG), DOW 30, 2x (NYSE:DXD), Materials 2x (SMN),

Emerging Markets 3x (NYSEARCA:EDZ), S&P 500, 2x (NYSEARCA:SDS), Financials 2x (NYSEARCA:SKF), China 2x (NYSEARCA:FXP),

Energy 3x (NYSEARCA:ERY), DOW 30, 3x (NYSEARCA:SDOW), NASDAQ 2x (QID), Russell 2000, 2x (NYSEARCA:TWM),

Small Caps 3x (NYSEARCA:TZA), S&P 500, 3x (SPXU), Financials 3x (NYSEARCA:FAZ), Semis 3x (NYSEARCA:SOXS),

NASDAQ 3x (NASDAQ:SQQQ), Russell 2000, 3x (NYSEARCA:SRTY).

Non-Leveraged Short ETFs:

Emerging Markets (NYSEARCA:EUM), DOW 30 (NYSE:DOG), S&P 500 (NYSEARCA:SH), NASDAQ (NYSEARCA:PSQ), EAFE (NYSEARCA:EFZ),

Russell 2000 (NYSEARCA:RWM), Active Bear (NYSEARCA:HDGE), OIL (NYSEARCA:DNO).

GOOD LUCK!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.