Squawk Morning Briefing: The Springsteen Market

Madman drummers’ bummers and Indians in the summer with a teenage diplomat.
In the dumps with the mumps as the adolescent pumps his way into his hat.
With a boulder on my shoulder feelin’ kinda older I tripped the merry-go-round.
With this very unpleasing sneezin’ and wheezin’ the calliope crashed to the ground.

The calliope crashed to the ground.

-Bruce Springsteen, “Blinded By The Light”

Perhaps whoever coined the phrase “dog days of summer was a trader.” It captures the essence of this late August market, laying around panting in the heat and not moving too much. Of course this is predictable as the wave count seems to have us in a corrective pattern and those have a habit of showing up at dull times.  Small degree corrections seem to show up at lunch time and larger degree corrections near holidays.

Or perhaps that heavy breathing is just a bout of quantitative wheezing as exhausted markets hope for some sign of added liquidity from a tired Fed to prop up a tired market at the upcoming Jackson Hole meetings.  We still anticipate that the market has made, or is working its way into an important top and what we hear from Bernanke and company might affect whether markets still need to work their way into a new high before dropping or whether traders are ready to cut the market loose like a deuce.   Continuing to view the market through the songs of Bruce Springsteen, perhaps it all depends on what happens down in the Jackson Cage.

The Jackson Cage
Down in Jackson Cage
And it don’t matter just what you say
Are you tough enough to play the game they play
Or will you just do your time and fade away
Down into the Jackson Cage

-Bruce Springsteen “Jackson Cage”

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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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