Squawk Evening Update: What a Week

We survived another week; at least this week felt like a survival challenge.  Readers who have been following this newsletter know that our evening updates are a chance to recap the day and reflect, as well as set the stage for what we plan to analyze overnight.  Weekends are a good opportunity for reflection, and with such an eventful week now at a close, we’ll omit most of the reflection tonight and take the weekend to digest events and come back fresh Monday morning all ready for another week.  Of course, the coming week will have options expiration waiting for us, so we’ll want to be ready.

We will briefly wrap-up performance of markets.  The corrective appearance of  Thursday’s decline was confirmed today with new highs.  As frustrating as this game of push me, pull you has been, the one reflection we will share is that wave theory has been holding up.  We saw what appeared to be corrective action down and it told us to look up.  Today’s advance in the DJIA extended to five waves and may, or may not be complete.  Once it is done, we should get at least a little correction.  At some point a small correction will turn into something more, but until something more is confirmed, we’ll keep looking for five up as a possible turning point and then watch for signals of further downside development or of return to an uptrend.

The Euro showed us a little something different today.  It dipped below Thursday’s low before the jobs number and then was made before 8:30 and then swiftly shot up on news, only to immediately sell down to new lows for the day.  After another recovery, the Euro chopped for the remainder of the day.  Our gut impression is that when we study the Euro in detail over the weekend that we’ll conclude that the patterns tell us it could go either way.  But the pattern is complex and we’ll wait until we do the actual analysis.

Have a great weekend.