Squawk Morning Briefing: Trend Revisited

It is worth reviewing our comments from yesterday as they are central to how we use Elliot waves to interpret the actions of markets.

In our view, the most significant observations of R. N Elliott is that trend moves occur in five waves and counter-trend moves arrive mostly as three-wave moves. The group of rules and observations which we call our Elliott wave framework sometimes lets us pinpoint high probability turns and identify useful trading targets. However, knowing the direction of the trend trumps all else.

We are still waiting until we can observe a five-wave move down in equity markets. Once it arrives, it would be a strong indication of a downward trend. Until then, our framework tells us that recent action is suggestive of more follow-through to the downside. Nevertheless, until we can see five waves down we haven’t met the conditions to identify a downtrend. As always, specifics of what would help establish a trend are identified in today’s videos.

In today’s videos we discuss the implications of a continued rise which has occurred without observing the five waves now needed to confirm a change in trend.  David is filling in for Kevin today.

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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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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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