Squawk Morning Briefing: All About GDP

For those watching the DJIA, CVX is the earnings announcement to watch. Since it sports the second highest share price in the DJIA, a 1% move in CVX has the second greatest impact on the index — about 8 points. That is only shy of IBM which moves the DJIA more than 14 points with a 1% move, but well above the index’s lightweight BAC which can only move the composite about half a point with each percentage change. That makes it worth watching.

The big news, however, is likely to be the advance figures on second quarter GDP. The monthly GDP releases come in cycles. First we get the “advance” reading, the first look at GDP based on preliminary numbers. The following month we get the “preliminary” reading and the month after we get the “final” quarterly GDP.

Sometimes the revisions in subsequent months can be substantial, but they are always relative to the baseline set beforehand. For today’s advance reading there is no baseline other than prior quarters and the various economic data which have been released throughout the quarter. That means estimates are quite widespread. That means that wherever the number falls it is likely near someone’s estimate but perhaps far away from many others. That could lead to some volatility after the release.

Another possible source of volatility may come in the form of revisions. The “final” quarterly number isn’t the last word and economists tweak annual numbers long after the fact once all the factors affecting GDP can be fully studied. Today’s report is scheduled to contain annual revisions.

The bearish wave count for U. S. equities still has not taken out our confirmation levels and prices need to turn downward soon or it risks being invalidated. Full details on the scenarios we’re watching are in today’s videos.

Read the Rest Now

The rest of this article is available to subscribers to the Elliott Squawk newsletter. Subscribers can login here to view the update. If you would like to receive this content, signup now for immediate access.

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.

To receive daily Elliot Squawk updates and get immediate access to this article and the entire archiive signup now.