Squawk Morning Briefing: Maintaining Perspective

We imagine that it is difficult for unemployed Greeks to not be angry.  After all, they likely believed what their politicians told them years ago and thought their country had a secure future.  Even if that individual can become content with the idea of needing to work longer than previously anticipated along with paying more taxes and receiving fewer government services, there is no clear idea where that job will come from.  What does that Greek do?  Sit and wait for that job to appear?

The same challenges face the unemployed youth of Spain and also those of Egypt, another country which voted this weekend in hotly contested elections.  From thousands of miles away, we can see the situation differently;  we can see that the current state of affairs is unsustainable even if we don’t know the solution.  For someone right in the middle of things it is often hard to make decisions;  they are anxious.  Anxious people, however, tend to make rash decisions and we can see the results of that play out in the markets with volatile movement in both directions.

There is a lesson there for us, we can take a step back and assess the markets.   We anticipate a turn back down and it may or may not have started.  At the moment the evidence still points to needing to move slightly higher before a turn back down.   Nevertheless, the YM futures reached the 61.8% retracement level overnight before turning down and it is possible that the move has already started.  We don’t need to get anxious that the move might be starting.  We have identified the evidence we want to see to convince ourselves and we just need to step back and watch the price action and wait for the signs.

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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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