Squawk Morning Briefing: Diverging Views

Our YM and DJIA videos have somewhat diverging views of how to interpret the short-term action today. So even while we may see similar larger degree scenarios for U. S. equities we see different possibilities for the short-term wave structure. In general, we think it is good to have two analysts viewing the same situation through different lenses but it does raise questions when the conclusions are different.

There are several possibilities given the current situation:

1. Both could be right.  Especially with cash markets close on Wednesday but with futures trading both in the morning and evening on Wednesday there is a potential for futures to make significant excursions to complete a move that cash markets are not going to make.
2. A complex structure is being built (likely a correction since they’re the ones which are complex) and we may not be able to identify it until it is complete but it would allow for both markets to be in the same sort of correction; or
3. one or both views short-term views are flat out wrong.

Elliott waves often tell us what to expect but, unlike many other frameworks, they can have an indication to represent “I don’t know.”  In general, indications on several timeframes still hint at up but there is significant uncertainty as to when that move will come and from what levels.  Therefore, this seems a time for caution and to wait for corrective moves down complete before taking any action.  Especially since one might observe action which alters the view while waiting.

 

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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:

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