The Euro bounced Friday as a US debt deal looked increasingly unlikely. If - when - a deal is done, it probably test the 200 day MA. And I think it will fail. The problems in Europe are not over.

This is what recession fear looks like - a flattening yield curve as long term yields fall. Despite the flattening, the yield curve is still historically steep. No recession - yet.

The Australian $ made a new high last week. Considering the potential for a China slowdown, I don't think this makes much sense, but fear makes people do strange things.

The Yen also captured safe haven bids and made a new high. Japan has a more severe debt problem than the US so I don't think this one makes much sense either. Are markets rational?

Gold stocks took a hit despite the metal making another new high. The index is just above the 50 day MA but I don't trust it. If these stocks can't rally now, when?

Gold made a new high on fears over the debt ceiling issue. Until gold ends this uptrend, don't expect much good out of the US economy. When it does fall though, look out below.

Commodity indexes fell back last week despite the gold rally. A debt deal and dollar rally will likely see the downtrend resume.

The REIT uptrend is in serious trouble. I've tried to call a top here before and been wrong but nothing grows to the sky. Keep in mind that REITs are dollar senstive. A sustained dollar rally would probably be the final nail in the coffin.

Crude oil sold off on the weak economic data but held just above the 200 day MA. I think a downtrend is developing and a break of the 200 day for good is only a matter of time.

Mortgage REITs have taken a big hit on funding fears related to the debt ceiling debate and a flattening yield curve. Expect a big rally when the debt ceiling is raised.

Ten year Treasury yields fell hard last week. The obvious target is the rising uptrend line around 2.5%. That's a scary thought.

Emerging market bonds are overbought and due for a pullback. I'm getting very nervous holding these but not selling yet.

TIPs continue to make new highs. Fear of QE 3?

Asia ex-Japan was down last week but not much. Still holding above the 50 and 200 day MAs. Could be setting up for a significant relief rally.

Brazil's been going sideways for almost two years now. Base for another big move higher? Or a long term topping process? My vote is for the latter but I'll let the charts speak for themselves.

Emerging market stocks barely hanging on above the 200 day MA. I'm very worried about a China slowdown and its effect on emerging markets but a relief rally with a US debt deal is probable.

Japan looks ready to resume the rally.

The small cap Russell 2000 briefly broke the 200 day MA. This looks like an emerging downtrend but the bounce will have to be evaluated.

The S&P 500 also briefly traded under the 200 day MA. Again, the bounce will need to be evaluated. I think we'll need better fundamentals for a new uptrend and that doesn't look likely right now.

Regional banks shares might be making a bottom here but there is a lot of resistance to overcome.