Squawk Morning Briefing: Bearish Case Building

Thursday’s trade was a great example of what can happen in a news-driven market during light-volume holiday trading. It can certainly make the short-term swings tough to hold onto. It can also make analysis of the short-term wave count more difficult. But in the bigger picture, we still know what we need to see in order to confirm the bearish view and in today’s videos we talk about the additional steps that were taken on Thursday to increase the likelihood of a bearish outcome and also the steps yet to come which would add further confirmation.

Without that downside confirmation we need to remain cautious about being overly bearish even as more and more weight is being added to that side of the scale. In the very short term we also need to be cautious about the multiple interpretations of the small degree wave structure. Even if the trend has turned down there are multiple paths to get there.

This multiple interpretations may just be the markets way of keeping options open in this news-driven environment. We still need to respect that. We know what the market needs to show us to convince us it is continuing downward and we update that discussion in today’s videos. For equities, the DJIA and YM discussions are combined today as Kevin is out of town. He will return next week.

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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.

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