Squawk Morning Briefing: When Analysts Say “I Don’t Know”

The Dow Industrials and their futures continue to mike a series of very modes new highs. We suggested this was the most likely course, and it looks like the series of modest new highs is not yet over and we lay out the case for this in our detailed briefing on the DJIA and the YM. We suggest that it’s most likely by weighting the evidence for all of the possible scenarios and concluding that most of it supports a continued advance, albeit one that is likely to be nearly over. This is our job as analysts: to review and interpret the available information.

However, the situation in treasuries and the Euro are somewhat different today and address another situation faced by analysts: sometimes the available information is sufficiently ambiguous or contradictory as to not suggest a likely scenario. There will always be some degree of uncertainty in any analysis, but when there is no clear result from the analysis, it is the analysts job to report that fact. That is what we do today for treasuries and the Euro.

What is sometimes lost is that this is, in fact, the result of analysis and not the failure to complete analysis. Both treasuries and Euros are both clearly shouting “the direction is unclear” as loudly as they might sometimes shout “we’re going up” or “we’re going down.” It is important for both analysts and those who use the analysis to recognize this as a valid result. There are times when this is the message of markets and consumers of analysis should expect to receive that as the message when it is the correct one to deliver.

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Elliott Squawk delivers thorough market preparation every morning in time to take action during the trading day. By combining up-to-the-minute futures activity with traditional end-of-day analysis from cash indices, you receive analysis based on the latest conditions as the trading day sets to open. Each issue of Elliott Squawk goes beyond traditional Elliott Wave analysis because we recognize that trading Elliott Waves is much more than just looking at the most likely current count. Squawk will prepare traders to assess the market action as it unfolds by answering questions that any Elliott Wave trader should consider:

• What price levels and wave motions would confirm an expected move?
• What price levels would make an alternate scenario more likely?
• What technical indicators should be watched throughout the day to interpret wave action?
• What intermarket movements merit special attention to understand likely price trends?

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From time-to-time when circumstances warrant, Squawk will present analyses of other markets that help interpret wave action in a covered market. For example:

• If S&P 500 and Dow counts are ambiguous and NASDAQ behavior helps identify the likely next move then NASDAQ analysis will be presented.
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Kevin McEwen and David Starr are best known to First Wave chat room participants as Kevy99 and Managematics and by their reputation for their Elliott Wave counts that have predicted market turning points. Kevin has been counting Elliott Waves for 28 years, successfully forecasting market moves in virtually every financial environment. David brings together talents in financial market analysis and software development to his wave counting. He has authored many of the studies used by First Wave Traders as well as a number of proprietary studies to aid in counting waves.

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