Markets gapped down on the open and the gap was immediately faded. Price retested the lows before extending yesterday's rally. As we can see from the 15 minute chart below, we filled the bearish gap from Friday's jobs data and immediately faded. Note the negative divergence of the RSI to today's higher high, foreshadowing the end of the move. Now we have support from the bullish island gap which occurred on yesterday's opening gap up.
From the daily chart above, we see a possible H&S pattern developing within the consolidation channel.
On the 60 minute chart below, we see a lot of gaps, but only the unfilled gaps, highlighted in color are important. If the bulls are going to do something, now is the time to show their strength with the bullish island as support. Overall, the bears still have the upper hand, but they need to own it on the next test of the lower channel line.
Futures sold off during the President Obama's speech, but have since recovered to pre-speech levels. Chinese CPI and PPI data seeing further upticks in ES futures.