This is such a headline driven market, and I am not quite clear how much technicals matter right now but after breaking through the lows of the day about 45 minutes ago we fell a good 10+ points straight down in the S&P 500 and now are sitting in a mess of supports.

We see the 100 day exponential moving average at 1228 and the 200 day at 1236.

Of course all it takes is one good rumor and we rip higher by 3%.

The issue here for shorts is intervention - we now are getting rumors of it almost daily.  While it's been with us since late 2007, surprise rate cuts, new stimuli, et al have now morphed into political upheaval and complete changes in policy - really since latter 2008 in the U.S.  The day the ECB charter is changed to do unsterilized bond buying I could see the Dow up 500 to 1000 points.  And fast.  That will be a license for risk on, and a complete abdication of the last major central bank from 'sound money'.  That's the risk every short has to face from here forward whether it be the next few hours, days, weeks, or months between now and 'the event'.

Until then we are really in limbo.  I've been calling for an end game of ECB purchases of debt for over a year - now I am seeing it everywhere.  El-Erian just wrote today in the FT this is what has to happen.  So we wait for the sea change and Germanification of the ECB to die.

As an aside, French spreads are beginning to widen versus German debt.... rut roh raggy.