Your MUST-READ Morning Stock Futures Cheat Sheet: Buy the rumor, sell the news

The exclusive Markets Morning Report is supplied by The Precision Report.

The Precise Take – Buy the rumor, sell the news

Big Picture AnalysisYesterday, expectations for today’s ECB liquidity providing LTRO along with a Housing Starts beat facilitated a trend up day that closed at the highs in the US indexes.  Overnight, risk markets sold off on the three year ECB auction this morning, which came in with demand well above expectations.   The net liquidity addition was 210 [billion] euros, or $273 billion, which is nearly 2.5 times the monthly Fed injections during the QE2 era.  Inasmuch as the next LTRO is two months away (Feb 29), the ECB is on track to slightly beat the Fed if demand keeps up.  In the meantime, it will be critical to see how the issue of capitalization will be addressed, which so far only the Germans have.  We still don’t place too much stock in these short term fluctuations, especially in a low liquid holiday environment.

Existing Home Sales at 10:00 am EST is the major economic release of the day, while EIA Petroleum Stats at 10:30 am and the 7 Year Note Auction at 1:00 pm will also be watched.

Click above images for larger size.