Squawk Morning Briefing: Earnings Season Begins

Friday’s BLS report seems to have been a mixed bag.  A sizable number of new jobs were created, but perhaps not quite as many as optimistic traders were anticipating given the much more bullish ADP report from Wednesday.  Most of the job growth came from service jobs in areas such as hospitality.  These can be very seasonal and quickly reversed.  Adding to the mixed message category was the drop in the unemployment rate to 9.4%.  The decrease doesn’t look quite so positive when one notices that the size of the labor force also decreased, implying that the unemployment reduction was due to discouraged workers discontinuing their job searches.

We pay attention to these news events because they are often the catalysts that drive the market in the direction we expect based on our wave counts.  We continue to look for a major reversal in markets.  It may already be in place or might be coming soon and we continue to provide our daily commentary and updates on confirmation levels in our videos.

Now that the BLS report is out of the way, the next big catalyst may be earnings season.  Alcoa kicks things off after the close today.  Even though it is a relatively small component of the DJIA, it can set the tone and expectation.   As with the BLS report, Alcoa’s earnings are less important than the markets reactions and our Elliott wave framework provides us a way to evaluate that reaction.

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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:

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