There was no deal over the weekend, so you have the gap down on bad news. This is the opening that the market is presenting for the opportunistic. Sure, it's not as good an opportunity as the one you saw last week. But it is clear now that the Republicans don't want to push the nuclear button when they got pressure from business groups to not screw around with the debt ceiling. Which means they will raise the debt ceiling even if they don't want to do it on a clean bill.
We may get down to ES 1675-1680, intraday, but the pressure to raise the debt ceiling will force a deal together. And from what I saw on Thursday and Friday, there is a huge pent up demand for stocks after the uncertainty is lifted. Europe has been quite strong over the past few weeks despite US weakness.
You got the same preview of strength in December 2012 before the fiscal cliff deal got shot down on December 20. This market looks like it wants to hit 1720 after the deal dust settles, beyond that, it will be a wait and see scenario.
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