Tomorrow will be the tenth day of this correction, which means we are nearing an oversold reading. At tomorrow's close we will be oversold for the first time since early October. Typically the first oversold reading after a strong move higher is buyable. If the market were to decline through tomorrow, it would set up a decent risk/reward trade and I would likely increase my long exposure.
If there were any doubt yesterday about Italy needing help from the EU, that doubt is gone today as Italian bond yields are trading well above 7%. It was a matter of time before we reached this point. We are now likely to see the EU demand reforms in exchange for a bailout. There is likely to be a song and dance but at the end Italy has little choice.