This weekend Italy's 3rd largest bank, Banca Monte Dei Paschi is expected to be bailed out. The Italian MIB has rallied to the .382 retracement level of the 2015 - 2016 bear market. The rally from the low of the year is very choppy with a lot of overlap - the signature of a counter trend correction. The 2015 - 2016 decline counts as a extended five wave Elliott pattern. If a top is near, the subsequent decline could at a minimum go back to the low of the year. A larger decline could be as big as the 2015 -2016 bear market.
If MIB turns down soon it could cause other European stock indices to decline and could also be bearish for US stocks.