Guess what? Reports indicate that the Euro-zone bailout fund is smaller than EU finance ministers once thought. There is also a “secret” report suggesting that Italy is on the verge of blowing up the Euro zone. Yes, the rumors continue to fly. These latest rumors are putting a damper on stock futures and the Euro early Wednesday (5AM ET). In addition to the European issues, don’t forget that it is a big week for US economic reports. Among others, we have the Fed’s Beige Book on Wednesday, ISM Services on Thursday and the big Employment Report on Friday. Short-term traders will no doubt have plenty of volatility and excitement the next three days. It should be noted at the bigger trends for stocks and the Euro remain down. This means that any bounces are considered corrections within this bigger downtrend. On the price chart, SPY gapped up on Monday, formed a small falling flag and broke flag resistance early Tuesday. This breakout, provided it holds, is short-term bullish and targets a move to the next resistance zone in the 122-123 area. I am marking first support at 119.40. A move below this level would negate the breakout and put Monday’s surge on notice. RSI surged to the 50-60 zone early Monday and did not break this resistance area to stay in bear mode. StochRSI moved below .80 to signal a short-term downturn in momentum. StochRSI, being the hyperactive oscillator that it is, can be used to identify short-term overbought conditions within a larger downtrend. A move back below .80 signals an end to these short-term overbought conditions and serves as the first bearish signal.