Squawk Morning Briefing: Will You Still Save Me Tomorrow?

With Greece saved, markets maintained an uptrend last week. The move continues to appear weak for all the reasons we have cited, but a trend is a trend until it isn’t. So that doesn’t mean that the market needs good news in order to retain its current direction, but it does cause us to wonder who the marginal buyer would be at these levels and what would be the catalyst. Europe probably can’t be saved again, at least not for a few weeks or months until it is once again perceived to be in trouble. However, the week ahead has a full slate of economic reports both in the U. S. and abroad. Those could be either positive or negative.

At times, buying itself can be a catalyst for more buying. However, new multi-year highs are not seeing much follow-through. This, combined with our Elliott wave observations, supports the notion that conditions are ripe for a turn down. However, this, too needs a catalyst. In strong markets, negative catalysts may generate short-term selling that is often reversed. In weak markets, it builds on the fear which already exists, leading to greater follow-through. Our observations suggest that if that catalyst arrives, the follow-through seems more likely.

As with the upside, downside catalysts do not need to be news-based. The observation of selling itself can be enough to ignite the fear which starts the profit-taking process. Whether inspired by events or not, we can identify the start of the process by observing selling that is impulsive and bounces which are corrective. Today’s videos have our latest update on individual markets and the particular signs we’ll be looking for.

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The Elliott Squawk Newsletter

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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