I wonder where Italian bonds will go tomorrow?

I guess they don't want to spook the market, so Italy just won't tell them how bad their Q3 GDP was.  Not to be chicken-little, but this is a bit worrisome.
No trade just yet, though.

I lied

I'm not staying in for the ride.  My futures account was finally transferred to RJ O'Brien, so I closed my EEV position at breakeven and transferred all my funds back to my futures account.
One thing I've learned since trading futures is that the huge leverage you can take means you should trade sparingly - only when you're near certain of direction and timing.  I hope I can retain that lesson.

Gosh Darnit

Now I'm staying in for the ride, and given the rumor-mill in Europe, the hopium the market is smoking with blinders on from euro-fatigue, I think it will be a ride.  Bought EEV at 32.89.
The only thing that will keep Italy and Europe from imploding is a miracle.  I don't believe in miracles.  The ECB may have been able to save Italy by itself last week, but if they want to now, they will have to do a QE-like program and buy up trillions of bonds.  What about Germany signing off on that?  exactly.  What about Italy reforms/austerity passing?  good luck with that - if it happens, its going to be too little, too late.  Probably.
And I'm not so sure Berlusconi's resignation will be as simple as the media is making it sound.  Don't you think Berlusconi will at least be negotiating for immunity, if not to stay in power?
I'm not 100% comfortable shorting oil, though.  While I think the probability of an Israeli strike is small, the severity of loss that a short-oil position would sustain makes it not worth the risk.

...

I may have to eat my words from yesterday.  I'm not sure what Berlusconi's resignation does, exactly.  It doesn't mean austerity/reforms will pass or that they will be sufficient, and even if they do, who knows when they will pass, and even if they do -- Italy is in a recession -- anything they do now is insufficient.

My only guess is that the ECB's boycott of Italian bonds was enough to push him out.  Maybe I misunderstood his ambitions.

Anyways, I can't hold my position.  Oil at this level is just stupid - plenty of slack in the market, low U.S. economic growth, the Euro is in recession, China is slowing...which probably means its going to fall, but I can't hang on - margin calls.  Maybe I'll get back in if it looks like its coming back to reality.

Taking my lumps: Sold SCO at 41.99.  Loss of 18%.  Should put the PSFI index at 125%.

How can you be so obtuse? Is it deliberate?

One of my favorite lines from "Shawshank Redemption."  Italian 10 year is over 6.5% and rising, the 2 year was up to 6.2%, stands at 5.9%.  "But, if Italy can implement reforms, they can grow and narrow their 4% budget deficit!"  Have you seen the Italian PMI numbers?  Either the PMI surveys, which have been a pretty accurate predictor of GDP, are completely wrong, or Italy is already in recession, and the 4% deficit will rise higher, reforms or not.  Given where yields are, it would take alot for the ECB to rein it in -- which they can do, it just looks like they don't have the will (wanting to get Italy to act right) or ability (German pressure).
And oil...what can I say?  Hints from Israel?  Maybe, but the market is even more desensitized to those than they are to Europe's "all fixed!" declarations.  My sense is that hedge funds, traders, et. al., are in denial, trying to make money before the year is out, hoping things work themselves out, and the market goes higher.  I was watching Bloomberg earlier this morning, they were interviewing traders, and that's the impression I get from their sanguine views on Italian yields.  Rumors of Berlusconi resigning?  That's ridiculous, even for a euro-rumor.  They don't know their man - Berlusconi would be dictator if he could install himself as such.

Italy again

Italian 10 year yields back over 6.4%, and rising.  2 year over 5.5% and rising.  French 10 yr spread over 1.25% and rising.  2 yr euro swap spreads over 104 and rising.
And Italy is still in denial.  Berlusconi this morning said that the pressure on him to act stems from prejudice against Italians.  Good grief.
I would expect the ECB to come to the rescue this morning, and every morning, even if it means printing.  Things could get ugly if they just let them go on.  Italy needs to get its act together quickly, or all bets are off.

Update:
It doesn't appear the ECB came to Italy's rescue today, but their 10 year closed at about 6.35%.  Perhaps the ECB is showing Italian politicians what's going to happen if they don't get rid of Berlusconi and implement real reforms, real fast.  Either way, with Italian yields circling the drain, unless the ECB steps in, next week is going to be an ugly week.
Add to the uncertainty over whether reforms will even happen is the fact that Europe has now entered recession - even if reforms take place, deficits and debt will continue to rise.   These are the [post flash / final] updates to the Eurozone PMI reports for October, with Italy and Spain now included.

Italy

Italian 10 year yields hit 6.4% today before the ECB came in and pushed them back to 6.2%.  The Italian government seems to be in denial (read this article).  If CDS aren't worth anything because a credit-event can be deemed not-a-credit-event at will, its likely that banks will want to reduce their exposure to bigger risks, e.g., Italian bonds.  And with the ECB seeming to signal they are willing buyers, banks might decide to dump.  The risk-on rally today is a bit puzzling, given the deteriorating situation in Europe.  You really have to put on blinders to buy in this market - maybe Euro-fatigue has caused many to do just that...

F it, I'm back in

I feel more comfortable shorting WTI with inventories coming in higher this morning.  My futures account is waiting on Etrade transferring it from MF Global to another broker.  Bought SCO at 45.87 (roughly $92.50).

F it, I'm out

Sold EEV @ 32.20, gain of 1%! lol
Too bad I didn't stick with my stop order from yesterday.