Squawk Evening Update: Still Need Confirmation

The Euro is right in the middle of the first possible reversal target we published several times last week.  The Dow put in another new high today on waning momentum and then continued to sell off.  However, an earlier sell-off had invalidated the possible ending diagonal pattern so we’re left with an ambiguous count in the Dow.

From a pure Elliott Wave perspective, the most bearish thing we could say is that the top might be in.  Also, in both the Dow and the Euro highs are just below significant FibGrid targets and are trading back below them now.  If the decline that most Elliott Wave theorists are anticipating is upon us, waiting for a bit of confirmation should only have traders missing a small portion of a large drop.  Tomorrow morning we can see if overnight currency and futures activity has anything to clarify the picture and we will have a bit more to say about the outlook, but perhaps not more than a little bit.  As traders, we have to be intellectually honest with ourselves and admit when signals are less than clear.  This is one of those times and we should trade accordingly, no matter how boring that might seem.