NEW YORK ( TheStreet ) -- U.S. stock futures point to a sharply higher opening Monday following last week's sharp decline.On Friday, we said the market felt heavy, but it was tough to be short given the amount of attention being paid to the crisis by European policy makers. There was no concrete resolutions over the weekend, but hopes are growing that leaders will find a solution to the sovereign debt crisis. From an active-trading standpoint, this has been a difficult market to navigate. Your first goal in an environment like this should be preservation of capital. If you choose to make directional bets amid the volatility, it is best to step in only at the extreme ends of the range. Equities were not the only asset class to get hit last week. Former safe havens like gold, silver and the Swiss Franc sold off hard. You must respect stops and all technical signals to stay ahead of the game. Last Tuesday's push-through failure in the S&P 500 was the signal to lighten up on longs after a nice run, and then a break of the 1188-1192 zone was another clue to get into more cash. At this point, the complexion has changed and it now seems we will be in strong dollar environment for months to come. The carry trade is off the table for now. The dollar broke its downtrend back on September 6th and its riding the 10-day moving average, but is a bit extended on a short-term technical basis. The S&P held the 1101-1120 area, but we fell 100 handles or so into that spot. With futures up about 16 handles, there is room to bounce to 1142-1147. Perhaps we can event test the 1162-1166 area, which will be an area the bears will try to defend. I still feel if we are ever going to take out the 1101-1120 area, it should happen in the next four to seven sessions. Any way you slice it, there are a lot of cross currents to deal with right now.
Keep in mind that the end of the quarter is Friday. Should we expect "window dressing?" It's the end of the year for some long-only mutual funds. Do they have more cash on the books that must be used before year-end? Remember what happened in the end of the second-quarter, we got caught in the tail end of the short squeeze that took us to our limits. Then we fell 200 handles in the next two months. Some of the stronger stocks are still holding higher but are hard to trust and sink your teeth into. Apple ( AAPL) held its 10 day -- you can still be in tier one long and trade around a core long-term position. If the stock breaks $395-$397 it can see $383-388. The other market-leading tech stock -- Amazon ( AMZN) -- also held higher but has the same story. When the wheels come off, even the strongest stocks have a tough time holding up. DISCLOSURE: Scott Redler has no positions