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Minyanville's T3 Morning Market Call: Market Expecting Greek Debt Deal as Futures Surge

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Reports suggest finance ministers and creditors are making progress in Greek debt talks, which are set to conclude by the end of this week.

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US stock futures point to a higher open on Tuesday, building on yesterday's trend higher following a gap down. Reports suggest finance ministers and creditors are making progress in Greek debt talks as Greek Prime Minister Lucas Papademos said late Monday that talks would conclude by the end of this week. Also, 25 out of 27 EU leaders yesterday signed an agreement that would create a tighter fiscal union, a big step in keeping the euro currency together. The euro surged overnight on the news.

Technically, the much-balyhooed Golden Cross formation seems to be coming to fruition in the market. A Golden Cross occurs when the 50-day moving average crosses back above the 200-day moving average, and simply represents a new uptrend being formed. Bulls remain in full control of this market, buying gap downs and not letting the bears get any traction. Patti Domm quoted me in her CNBC Market Insider blog last night regarding this pattern.

Earnings season rumbles on this week with a slew of high-profile reports. Exxon Mobil (XOM) had a chance to re-take its perch as the most valuable company in the world with its earnings report this morning, but the company slightly disappointed investors. The stock is slower despite exceeding EPS estimates. Earnings rose 2% but production was down 9%.

Toy maker Mattel (MAT) reported a 14% rise in earnings and boosted its dividend by 35%, and the stock is up 2% this morning. Pfizer (PFE) is only marginally lower after its earnings following a narrow beat of earnings expectations. Eli Lilly (LLY) is up 3% despite reporting a 24% drop in Q4 income, largely due to patent expirations on Zyprexa and Gezmar drugs. Traders and investors will be watching Amazon.com (AMZN) closely as it reports after the close today.

Technical Take

The market gapped down the last two sessions, but each gap was taken in stride by the resting market. Yesterday, the bears had the chance to press when S&P 1303-1308 was breached. They showed that their hand has no power right now. The floor continued to hold and the constructive bullish case continues to build. We have month-end mark-ups coming and some new monthly money flows coming in, so if you have "short on the brain," it probably would be good to switch gears and not fight the tape. Yesterday's dip was not the easiest to buy, but staying the course long continues to reward the bulls.

S&P resistance is 1320 then 132, with the year high at 1333. I don't think we close above the year high in the next day or so, but a close above 1333 opens the door for 1347-1353. 1370 is last year's high.

Let's see if this gap up holds. We have a decent travel range from yesterday's low to today's gap up, so don't chase in the first 30-60 minutes.




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Scott Redler is long SPY, OIH, WMT, LULU, AAPL, GOOG, MCP, REE, QCOM calls, DNDN calls, VXX. Short DIA.
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