European Trade: European markets opened the trading
session slightly above the break-even line, recovering a small
percentage of the declines seen in Monday trade. However, the vast
majority of companies are trading flat, with gains coming almost
exclusively from the energy sector.
The increases in the
commodity sector were best reflected in the U.K. FTSE, were the raw
material companies have an important weight in the index. Since the
session started, the U.K. FTSE advanced 0.50%, leading the gains in
Europe. At the same time, France's Cac 40, Germany's Dax index and
Spain's IBEX advanced between 0.15% and 0.25%.
Despite the small
gains seen in the advanced European markets the Eastern European block
took a strong beating in Tuesday trade. Poland moved down 1.20%, Russia
fell 1.50%, Romania dropped almost 2%, while Hungary lost 0.90%. The
worst participant in Tuesday trade is the Austrian stock market, which
tumbled almost 2.50%, as Verbund, Voestalpine and Wienerberger plunged
almost 5.5% in intra-day trading.
S&P Technical View:
4 Hour chart trend: Long. Main price points: 1062.50, and 1098. Looking for: Wave 5) top
S&P
futures fell powerfully on Monday, exactly into the 1062.50 support
region we discussed here last week. This area needs to be taken out for
a down-trend continuation with our primary wave count, which will
suggest that the top is in. Traders however, should also be watching
the alternative wave count where a move higher in wave Y may be the
case if the current support around 1062 with wave X holds. This is a
swing point of great importance, and may be guided by earnings momentum
to move long, or worries in the financial sector to move short.
Sector Moves:
The financial sector continued to decline at a very strong pace in
European trade, extending the declines seen during the prior day of
trading. On the German Dax, Commerzbank plunged 4.50%, while in the
U.K. FTSE Barclays fell 5.50%, Lloyds 3.40% and Barclays 2.80%.
In the Swiss stock exchange, banks were a little more sheltered from
these strong declines, but still the banking sector is the worst
performer of the day. Credit Suisse lost 1.80%, while UBS declined
1.20% in Tuesday trade.
