Squawk Morning Briefing: Flip Flop

The recent back and forth in markets seems to have pundits switching sides faster than we can track.  Those who are bullish on improvements in the U. S. economy one day suggest that it could all fall apart on European worries the next.   Meanwhile, those who were worried about Europe last week are relieved to see that the Euro hasn’t fallen further despite Monday’s decline in U. S. equities.

We applaud those who have the courage to adapt their outlook as facts change and we strive to do the same thing ourselves.  However, we note that recent price action is typical of market tops and the back-and-forth in markets is often accompanied by back-and-forth in perceived financial and political prospects.  That means when investors are most in need of guidance, it changes the most.

The nature of our analysis is different.  We also have to change our outlook at time, but usually not based on day-to-day news flow, and usually based on price action we cite in advance as something which would alter our analysis.  While we must continue to allow for the idea that our view might change, we have maintained a consistent view of where markets are headed in the long term.  Any short-term changes affect when they might go and not where.

Note: U. S. Equity markets will be closed on Thursday and will trade on a shortened schedule on Friday. Our last full briefing for the week will be on Wednesday morning. We will resume our regular schedule next week.

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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?

Markets Covered:

Each day Elliott Squawk will update the outlook for the following markets:

• The Dow Jones Industrial Average
• YM e-Mini Dow Futures
• The S&P 500
• The EUR/USD cross
• The U.S. Dollar Index
• U.S. Treasury bond futures

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.
• If the EUR/USD count is ambiguous and the USD/CHF cross helps us to understand what might happen then we’ll present the intermarket analysis the Squawk subscribers.

At the end of the day Squawk subscribers will receive a brief market recap that summarizes how the day’s events compared with expectations and what issues are likely to be analyzed in the following morning’s Elliot Squawk.

About the Analysts

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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