Government bonds, with the exception of Germany, sold off sharply yesterday, causing yields to rise across the Euro zone. Italy’s benchmark 10-year bond is back around 7%, and Spain’s is not far behind. Earlier today yields dropped slightly amid talk of Italian bond purchases by the ECB, but they were back on the rise later in the day. Even AAA rated countries like France, Austria and Finland has seen their yields rise to unusually high levels.

So far, US markets have held in strong despite the turmoil in Europe. We could be seeing a decoupling of US and European markets, or investors could be counting on major policy intervention from European officials. The US economy now seems in decent shape compared to its European counterparts, and earnings season once again surpassed expectations. The central issues remain the employment picture and housing, which are core ingredient necessary to stoke an economic recovery.

A few major earnings reports came through within the last 12 hours and were a mixed bag. Abercrombie and Fitch (ANF) continues to falter after flying high earlier in the year. The stock is off another 11% after EPS missed by a wide margin. Dell (DELL) also missed quarterly EPS expectations and is trading off 1.8%. Target (TGT) bucked the trend and beat expectations, and is trading 2.5% higher.

Technically, the wedge pattern in the market is close to resolution. We have seen a lack of conviction from bulls and bears over the past few weeks, and with the range tightening there will likely be a definitive move in either direction within the next few sessions. European headlines would lead you to believe that break would come to the downside, but bullish action in the face of those issues can be seen as a major positive for the market.

*DISCLOSURES: Evan Lazarus has no positions. Scott Redler is long AAPL, BIDU, SNDK, SPY, GLD, MGM, REDF, GOOG, SPY calls.