Early Update

Some of the early optimism I saw late yesterday in the 5 min chart, which caused me to speculate we may see a gap up this morning, has started to fade, but of course it is early and it is Op-Ex Friday.

It seems the catalyst for the move has been centered on renewed rumors of the ECB lending money directly to the IMF and the IMF acting as the bailout mechanism for Europe as the ECB has its hands tied by law and convention treaties as just how far they can go.

The split between those who want massive printing and monitization of EU debt (that crowd includes France and just about every bank that has exposure to Europe and that is a very high % of banks) and those who oppose it (the Germans who hold all the money and now most of the power in the EU) is coming to a crescendo.

The possibility that Germany simply walks away or continues with treaty reforms to kick out countries from the monetary union, which could include recent secondary EU super power France, is gaining traction in Germany and plans for this eventuality seem to be much more advanced then Sarkozy new as Merkel may have been buying time in the Mer-Kozy phase of cooperation to keep working on Germany's super secret weapon.

So the rumors have come this morning, they have been dismissed, but they are still sticking. I have some interesting perspectives to share with you, but for the moment, the initial strength that was developing late yesterday, has begun to moderate.