Squawk Evening Update: Subtle Changes

A few things seemed to go along with our expectations published this morning.  We suggested that a fifth wave in the Euro would likely still subdivide upward and, indeed, we continued to see new highs.  We also suggested that if bonds were going to falter that they would need to get moving.  They put in a decent red bar today on the hourly charts.  However, it’s still not certain that down will continue to be the direction for bonds.   As we prepare for tomorrow morning’s briefing we’ll look at the bonds more to see if there are additional clues in addition to providing an updated outlook on the Euro.

Equity indices broke to minor new highs.  The fact that it came on choppy action and in a tight trading range seems to reinforce the indecision we discussed in this morning’s video.  That seems to have given way to a decision to go upward.  Indecision like we’ve seen tends to come toward the end of moves and that has us looking at the chop over the past few days as either a triangle correction or an ending diagonal.  Both scenarios would lead to a reasonably predictable upside target before a turn downward for at least a correction.  We’ll discuss the patterns, possible targets, and how we can make bet use of that information in tomorrow’s briefing.