Squawk Morning Briefing: Eyes on Europe

Overnight news out of Europe does not sound promising. Eurozone manufacturing PMI printed 45.9, just 0.1 shy of the prior reading and current consensus. That may not be enough of a miss to qualify as a disappointment, but it is enough of a new low to qualify as the weakest print in three years.

With expectations for 46.0, analysts and markets seemed to think manufacturing contraction (anything below 50.0) was a foregone conclusion. Of course when the manufacturing base erodes it puts people out of work and the extent of employment weakness overnight did seem to surprise folks. 19,000 Germans joined the jobless ranks when expectations were for the number to decrease by 9,000. Meanwhile, analysts expecting 9.3% unemployment in troubled Italy were likely shocked by the 9.8% that came over the wires.

This has helped to take a little wind of the sails of U. S. equity futures which sold off a bit more overnight, adding to Tuesday’s late day decline which gave back a decent portion of the day’s gains. However, it will take much more significant selling from here to clearly show that the wave patterns are now ready for a bearish resolution. While we can identify scenarios where prices could turn down from near current levels, Tuesday’s new high in the DJIA also paints the picture for scenarios which need to see higher prices before a turn.

Meanwhile, the Euro currency is beginning to show clearer patterns suggesting that it may be ready to resume its decline. It is still early in the move and we need to insist that it confirm its intentions in order to continue looking for a decline. Today’s videos lay out the details of what we’re looking for in the Euro and all the market’s we cover

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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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