Squak Morning Briefing: Will Markets Make Decisions Today?

As U. S. equity markets prepare for their first trades since Friday, our Sunday night video on the DJIA remains the most up-to-date interpretation of the wave structure. The story is the same as it has been since the middle of last week: prices need to break down dramatically from recent levels in order to maintain the possibility that an important high has been seen; strength above the FibGrid treeline will suggest that the move down from October 5th is more likely only a correction with a new high on the way.

Futures tested the bottom of the recent range this week and failed to break down decisively. They have recovered more overnight and now, as of 6:30 EDT, are in an area that suggests we may open near the DJIA treeline. That sets the stage for some important decisions today. While current prices suggest that if a decision is made, it will be to the upside, we need to remember that we need to see the clear action that we’ve discussed for several days and not just a visit to this area.

Failing to head up decisively allows for the possibility that we might confirming action to the downside or put off an important decision by remaining within recent days’ range.

We have already talked about the unusually reliable end-of-month in October. With markets closed on Monday and Tuesday it remains to be seen whether that will lead to an extraordinarily strong last day of the month as mutual funds facing their last day of the fiscal year squeeze three days of activity into one or if two days of closures alters the typical pattern. Based on our analysis, we know that if an unusually strong up day would suggest that a new high is likely on the agenda.

It remains possible that equities continue to avoid a decisive move by returning to the range of the past week.

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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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