I am currently travelling and don’t have access to the in-depth and sophisticated Hubb charting I have come to rely on. There are plenty of websites that provide daily, weekly and monthly line charts and while looking at these it occurred to me that the Elliott chart I shared with you a few weeks ago is still the most relevant assessment of the current volatile markets.

The almost daily fluctuations of 2 - 3% on the Dow and European markets indicate people are confused. Volatility says that bears and bulls both have strong views and this causes the markets to move in big swings.

That now-weeks-old Elliott chart indicated the markets are going through an ABC pattern as a precursor to a possible move down to complete a wave five low and I expect this to be tested in coming weeks.

There are many investors who would like to jump back in but they are holding back as markets gyrate with the release (and even the anticipated release) of every morsel of economic data. I say there may be better opportunities down the track. A solid retracement will bring many buyers back but currently it seems there is little attraction to buy into these markets.

Enjoy the ride

Tom Scollon

Chief Analyst