European Trade: European markets started the day with very negative momentum, with the three main sectors, carmakers, banks and basic materials falling at a very strong pace. The vast majority of declines came during the early European trade, when BMW earnings disappointed investors, and after it was announced that RBS and Lloyds would receive a second bailout, worth of $54 billion. Lloyds and RBS were the most active shares in European trade, surpassing by a large margin the average of the last few weeks of trading.

In Europe, the major indexes are declining at strong pace, with the smallest declines coming from Finland's OMX and Netherlands's AEX indexes, which at -1.20%. On the other hand, the declines are led by the Austrian stock market, which plunged 2.5%. Interestingly, Austria's ATX was Monday's best performing market in European trade. The emerging European markets extended the slump seen during the prior day of trading, falling another 2% on Tuesday. 

The S&P futures are currently trading in the 1025.00 area, the same place where the market formed a swing point low in Monday trade. A break below this price point would extend the current downtrend, in which S&P futures have shed 6% in almost two weeks of trading. 
 


S&P Technical View:
4 Hour chart trend: Short. Main price points: 1030, and 1069. Looking for: Wave IV
 
S&P futures hit new lows yesterday, during Wall Street trade, which could be just wave B) noise, in an irregular wave IV) correction. If this is the case then another move up, near to the 1050-1060 area should follow before market trades heavily lower again.
 
If the long wave IV) completes, traders should look for another push lower, near to the 1011 support zone. The wave count stays valid so long as the market trades below the 1069.75 resistance area.

Sector Moves: Every single sector in European trade declined in Tuesday trade, with the strongest declines coming from carmakers, which plunged 3.6%, banks, which were down almost 3.00% and basic materials, which fell 2.80%.

On top of the negative news reports coming from RBS and Lloyds, UBS, one of the biggest European bank, posted the fourth consecutive quarterly loss. This has allowed the Swiss listed UBS to plunge 5%, dragging most of the financial sector lower. Credit Suisse fell 3%, Commerzbank fell 2.50%, while Societe General tumbled 5%. 

Interestingly, Lloyds is up 3%, being one of only two companies that advanced in the U.K. FTSE 100 on Tuesday.