Squawk Morning Briefing: Gimme An “I”

If we were to joke that DJIA really stood for Dow Jones IBM Average then it certainly wouldn’t be the first time. It also wouldn’t be the first time for us to mention “Big Blue” has far and away the highest share price in the price-weighted average and, therefore, its movements have the greatest impact. So it’s no surprise that it is making new all-time highs along with the blue chip index.

If you’re not following the stock then what might be more surprising is that IBM isn’t a little bit above it’s highest print in 2007 but more than double it’s highest share price that year. By our count, roughly half of the 30 components are also above their 2007 highs. Some, like DIS and MCD, are also well above those levels, but they haven’t scored doubles. They also don’t have the same share price as IBM and, therefore, don’t have the same impact on the index.

It will be hard for the DJIA to move too far to the downside until IBM finishes its rise. It also appears to be in a fifth wave and may be finishing its rise. For now, however, both IBM and DJIA remain in an uptrend.

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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?

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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.
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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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