Squawk Morning Briefing: Calling A Day

We saw the seasonal weakness come into markets as we discussed. When provided with enough clues one can often make a well educated guess about the general trend of the day, especially when one of those clues is significant movement in the futures from the prior day’s close. Factor in overbought or oversold conditions, some sentiment indicators, and an awareness of what news events might be coming and one can decide whether a high-probability forecast is likely.

If you practice the techniques above you could become a forecasting genius. Of course what you would have really perfected would be the ability to determine if moves which has already started in the the futures market were likely to persist to the close and then just calling a market which hadn’t opened yet. The real trick is anticipating what might happen more than a few days out.

To anticipate longer-term price movements we need to extrapolate the current trend. However, this can be dangerous in the current environment where the up-trend seems stretched and potentially running out of fuel. So we continue to look for signs of a trend change or, alternatively, signs that the up trend is gaining strength instead of losing it. Until those happen, things remain in limbo.

Wednesday’s decline was impressive, but for now it doesn’t prove anything. The weakness needs follow-through to carry it below support cited in our videos and in a clearly impulsive move. So far those are still missing. Until we see them, Wednesday’s weakness is a one-day move.

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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?
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• What intermarket movements merit special attention to understand likely price trends?

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