GUR (SPDR S&P Emerging Europe) & EEM (iShares MSCI Emerging Markets) breakdown trend channels

While I see a slight chance for the major S&P 500 to rally for a test of the 1000 mark the outperforming Emerging Markets are falling off a cliff.

GUR (SPDR S&P Emerging Europe) - I follow this market as I live in Bulgaria which is part of Emerging Europe and a EU member since 2007.

Technically speaking there are several points to acknowledge for the breakdown of the index:

1. The top of the trend is right at the previous Gap from Octomber 2008 which now acts as solid Resistance level

2. The reversal is accompanied by huge volume of transcations

3. We have a weekly close below the 50-week MA and a breakdown of the trend channel.

4. RSI is going for a dive below the mean and ADX has a potential to signal a short sell - both need to be watched for a confirmation though.

EEM (iShares MSCI Emerging Markets) - BRICs have outperformed the S&P as they witnessed a much greater selloff throughout the liquidity crisis.

Here are the technical points that add to the bearish sentiment:

1. The top of the recent uptrend coincided with the important 200-week MA.

2. The reversal candle is called Hanging Man for a reason and the last 2 weekly candles are confirming the Bearish implications of the Hanging Man candlestick pattern.

3. RSI and ADX have similar patterns to the GUR chart however they are not so much bearish and I would be watching closely for some divergence since Emerging Markets have a much different compisition than the Emerging Europe.

4. The breakdown of the trend channel is a sure sell signal however I would like to see the market reaction to the Support cluster at 30 (the Oct '08 Gap top) and 29 (the 50-Week MA.)