Squawk Evening Update: Again Looking for Confirmation

Today we once again saw some of our topping patterns play out, but this has happened before so we will continue to look for confirmation.  The Dow was probably the most dramatic example, it popped through the top of trendline of the ending diagonal as is expected of that pattern and then failed, with a move down that appeared to have five waves.  This suggests that at least one more five-wave decline is in the cards.  Right It also checked off one of our confirmation items, breaking the trendline and retesting it from below.  But there are others to tick off.  One noteworthy item is that we did not retest the 1932 FibGrid snow line from below.  This has been an important level and we will talk about the possibility of a retest in tomorrow morning’s briefing.

The Euro also popped to a new high at around 9:00am, about an hour before the first Fib time target at 10:00.  It then sold off.  However, The Euro doesn’t yet seem to show an obvious five-wave movement down and hasn’t yet met any of our confirmation conditions.  This leaves the door open to continued highs.  This leaves the door open for more upside should the Euro be inclined to walk through it.  Perhaps in the morning the wave count will be clearer.  Keep in mind we have another time target at 10:00 pm should news out of Asia cause a pop.

After being stalled in a corrective pattern at a place where A would be the same length as C, treasuries finally began to sell-off but eventually rallied back to maintain an inverse relationship to equities which had begun to sell hard, themselves.

In all, markets have started to turn in a way that could be consistent with a change in trend, but confirmation is still lacking.  Have a good evening.  We’ll be back in the morning with a full briefing.