Squawk Morning Briefing: Reconciling Differences

The view in equities is particularly cloudy at the moment, to the point where there are different implications to the best counts in the Dow futures versus the DJIA. This is primarily because we can observe a clear five-wave decline in the futures which would permit a corrective recovery to reach as far as the prior high before invalidating a bearish count.

In the cash markets, however, the picture looks somewhat different. In our video we pay passing mention to the possibility to the possibility that we have seen five waves down, but mostly dismiss it as being a less likely interpretation. However, we note in our DJIA discussion that if the move up from Tuesday’s ultimately ends up being a three wave move then it supports continued declines in some fashion. This is the unifying element that brings both interpretations together.

We can’t tell for sure whether the decline from current highs is impulsive or not. However, in both cash and futures the immediate rise is only three waves so far. If it remains that way then bears can take control. If the move up extends to five waves then the picture changes more bullish. The two sets of charts paint different pictures about which outcome is most likely at the moment.

Read the Rest Now

The rest of this article is available to subscribers to the Elliott Squawk newsletter. Subscribers can login here to view the update. If you would like to receive this content, signup now for immediate access.

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.

To receive daily Elliot Squawk updates and get immediate access to this article and the entire archiive signup now.