Squawk Morning Briefing: Short Term May Provide Clues

As discussed in our videos, there is growing reason to look for more upside potential from this market. That doesn’t mean we are going up as several elements cloud the picture, not the least of which is Tuesday’s momentary spike down. Furthermore, even if new highs are on the horizon, it is possible that a smaller five-wave advance is nearing completion. While we can’t rely on a deep downside corrective move, if it should happen that is the sort of situation which would set up an attractive looking long entry.

In situations like these when the picture is cloudy we want to wait to see some element that is tradeable such as a shorter term pattern which is clear. A completed downside corrective move would fit the bill nicely. Just remember, these patterns help us out because the bigger picture is less clear. That means we can’t rely on seeing it but can react if we do.

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