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Minyanville's T3 Morning Market Call: Greece Deal Approval Sharply Boosts Stock Futures

By T3Live.com Feb 13, 2012 9:15 am

While the market is cheering the new measures, social unrest in Greece could temper gains today.

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S&P futures are up 10 handles Monday morning, reacting to the Greek Parliament's final approval of new, stricter austerity measures. The vote now paves the way for another international bailout package that will prevent a hard default on March 20. While the market is cheering the new measures, social unrest in Greece could temper gains today. There were ugly scenes in Athens over the weekend with building-burning and riots in the streets.

Bank shares were the biggest beneficiary of this weekend's vote. Almost all banks are up over 1% on the news, and most significantly more than that. The market was pricing in a dangerous situation for the banks of Greece were to default, and the latest bailout with assuage those fears. Both Bank of America (BAC) and Citigroup (C) are up more than 2% pre-market.

On Friday the market showed some jitters regrading Greece as "procedural issues" were holding up the final approval process. However, despite its weakness the S&P couldn’t even break and close below the 10-day moving averages. The important technical levels held and bullish composure remained intact.

Technical Take

The strongest stocks usually ride their 10-/20-day moving averages. Since December 20, 2011, most of the indices have been acting like a high-beta stock. Friday was the first true test of the year, and markets took it in stride. The S&P actually held above 1333-1337 floor and the markets came off the lows, which was pretty impressive as the VIX came in hard during the last 30 minutes of trading.

Traders will have a lot to think about today as some prudent traders probably pared back some risk and stayed with some hedges. Some might have even added to hedges/shorts and sold too much of their longs. Either way, don’t be stubborn or opinionated. Let the trade unfold in the first 30/60 minutes and then adjust accordingly.

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