Failed Breakout

For the past week, most trading volume or "value" has been established above 1240 on the ES. A breakout to the upside and continuation of the uptrend seemed likely. Today however, a rally that would've started the next up-leg due to an IMF $600 billion lending program for the Eurozone [http://www.bloomberg.com/news/2011-12-07/u-s-stocks-gain-on-report-g-20-weighing-600-billion-imf-lending-program.html] was completely shut down. What's interesting is that the market may finally be reflecting the state of global economies: the recent "relief" rally was full of hot air; and the discounting of "good information" is becoming less effective. The chart above speaks volumes.

The markets have been chewing up and spitting everybody out with wipsaws, failed breakouts, etc. lately and it is driving even the most disciplined traders insane. The next breakout, whether it be to the up or downside will surely spike volatility.