European debt crisis subside. Late yesterday Greek lawmakers passed the next round of austerity cuts to pave the way for a much needed tranche of aid. The ECB will hold its monthly press conference at 8:30 am ET after keeping its key lending rate at 0.75%.
While the market has stopped the bleeding this morning, investors are still likely to be jumpy after yesterday’s high-volume sell-off. The split Congress, along with re-elected President Obama, have six weeks to negotiate the fiscal cliff in order to avoid sharp tax hikes and spending cuts that could plunge the US economy back into recession. Jobless claims are also due at 8:30 ET this morning.
The market is suffering a crisis of leadership at this stage as many former leading stocks are showing relative weakness. Apple (NASDAQ:AAPL) continues to sink after losing support of its 200-day moving average, and it will likely take some very impressive sales numbers to lift it out of the doldrums. AAPL is more of a trading vehicle right now than a swing trading candidate. Google (NASDAQ:GOOG) also broke lower out of a bear flag yesterday, and has lost its leadership status after the mid-day earnings debacle a few weeks ago.
More recently, the banks had assumed a leadership role, but that all changed yesterday. Perhaps fearing that President Obama could take a harder stance against Wall St in a second term, the banks plunged yesterday. Goldman Sachs (NYSE:GS) had been leading the sector of late, but fell more than 6%. JP Morgan (NYSE:JPM) could lead the bank bounce today as it is up 2% this morning after getting approval from regulators to resume stock buybacks in the wake of the London Whale trading debacle.
On the earnings front, Qualcomm (NASDAQ:QCOM) is up more than 7% pre-market after reporting a 20% rise in earnings and a better than expected outlook.
Subscribers follow the T3Live team in real-time on the Virtual Trading Floor(R) as the market tries to dig out of yesterday’s hole. Today’s action will be important to see how much of yesterday’s move can be negated, but overall this market is feeling heavy and jittery following the election. If you are interested in getting a trading education, make sure to sign up for T3Live’s Free Online Home Study Course.
Peter Renzulli is a Class B member of T3 Trading Group LLC and the Chief Marketing Officer of T3 Live. He has personally taught, mentored, and managed thousands of stock traders across the United States over the past eight years. Peter began trading commodities in 1995 and moved over to stocks full time in 2000.
*DISCLOSURES: Pete Renzulli has no positions
Morning Call with Pete Renzulli: http://www.youtube.com/watch?v=B9xZzPXZhuc