News of the EU debt resolution sparked a huge rally as depicted on the ES emini chart above. The ambush zone was broken and we expect this rally to continue to through to the end of the year.

The first chart is a wide range view of the S&P emini futures. We note yesterday's trendline breach and close near LOD. Today we gapped lower on accelerating mideast tensions and inflationary fears out of China (gold, silver, oil gapped higher). The gap was quickly filled, however, if we zoom in on the next chart below, we see that price couldn't close above the 5 day MA (orange), and hence, the downtrend resumed.

Small caps recently corrected to 50 SMA. Friday they provided leadership. As noted on Thursday, the situation in Egypt would affect trade. After testing and holding support, the markets retested resistance and rallied on news that the Egyptian President had stepped down.

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Marginally disappointing initial claims figures gave the bears the edge in pre-market. A 62% retracement of the early slide was ambushed and the S&P emini futures extended a full measured move in 30 minutes of fast selling. After the midday chop, no follow through occurred as participants were cautious ahead of tomorrow's jobs data.