We have the SPX 500 down over 29 points (as of 8:20am EST) from the close of the S&P 500. The SPX 500 slightly broke the 200 day MVA, but has continued to sell off as Berlusconi had announced his resignation. The Italian 10 Years bonds have also broken the 7% level after the announcement. This 7% yield level is a major inflection area because when this happened with Greece, Ireland, and Portugal they were forced to get a bailout. A combination of a resignation by Berlusconi, unsustainable yield curves, and Bernanke not leaving any hints of QE3 (scheduled 9:30am EST) would fuel a selloff in equities. When equity markets begin to drop we will see investors search for a liquidity provider such as the USD.
