Some investors are biding their time waiting for even an intermediate deal from TPTB in the EU. Other investors continue to head toward the exits as the ICI reports equity mutual fund redemptions exceeded $6.6 billion dollars once again. Late last week, Goldman Sachs saw future equity fund flows differently as noted below. Below you'll note estimates of ongoing withdrawal of funds from retail. On the other hand positive fund flows will continue via stock repurchase programs and hoped investment from overseas investors. The former is financial engineering, since companies with large cash reserves and little incentive to invest would rather buy back their own shares. This does little to stimulate economic growth and employment beyond decorating corporate balance sheets and making earnings look better spread over fewer shares.

It's also important to remember the growth of GDP in the eurozone has declined just as they're trying to resolve their debt crisis. It's a messy situation at best and the U.S. situation doesn't appear much better and is made worse by a cynical and unproductive election cycle.

It's the holiday season and most pundits in the financial media are talking up a Santa rally. This could happen no matter the news since portfolio managers (ourselves included) wish to improve on YTD performance.

Late in the day, and perhaps with nothing better to do, bulls got restless and launched some buy programs. Perhaps the release of a more unified approach to problem solving by Merkel and Sarkozy got the algo programs launched. It won't take much to get the animal spirits going in this environment. Gold rallied, the dollar was off slightly and bonds were stronger on the day. Oil and commodity prices were lower overall.

Stocks rallied sharply in the last half hour on the eurozone preliminary report, but in last few minutes saw rapid profit-taking as follow-through couldn't be maintained. Volume was somewhat heavier given the last half hour of program trading but breadth per the WSJ was mixed.

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The NYMO is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.

The McClellan Summation Index is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended.

The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge". Our own interpretation is highlighted in the chart above. The VIX measures the level of put option activity over a 30-day period. Greater buying of put options (protection) causes the index to rise.

Continue to Concluding Remarks

The bottom line is we're just waiting for the euro zone bailout such as it might be. No matter the spin it will be a band aid which will buy some time. With time on their side and the holidays bulls hope to build on the rally. Sometimes it's just that simple until it's not.

It's also the 70 th anniversary of the attack on Pearl Harbor. As a resident of Hawaii for 35 years some time ago I used to take pleasure in hiking up to the National Cemetery of the Pacific. It's a peaceful and beautiful place.

Let's see what happens.

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The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell any security.  Market sectors and related ETFs are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period.  Chart annotations aren't predictive of any future market action rather they only demonstrate the author's opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com .

 
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Dave Fry is founder and publisher of ETF Digest, Dave's Daily blog and the best-selling book author of Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management, published by Wiley Finance in 2008. A detailed bio is here: Dave Fry.