Here's the 4-Point I was discussing in Jim's Thoughts, with my key set. The key set line was the main factor for me. On the S&P cash it hit the line and 'tested' it three times pretty much dead on. No matter how you label this ABCD, it was an ABCD to me at a key line, with 'context'.





Now we sit at a key line, with TICK hitting an extreme, 1-min volume short-term climactic, and so on. It would be something to see if they can't bounce this up here. What a play so far, though, eh?!

Also, as a curiosity, the 1.618 hits near that lower //, just about at Laundry's low move for this leg. Very interesting.


Chart created on QCharts, courtesy eSignal.

I would agree with Jim that a bounce might be in order here. Very tight fib overlap.

So, it's pretty clear, the 4-Point reaches the most likely initial area, right at a monster set line. If it can't bounce here, I think one of my favorite chat room abbreviations will likely apply: KIG (Kiss It Goodbye). I think a bounce is likely, but either way, it's a big time for clues in here. If they can't take it up here...

Well, we got that up almost 20 ES points in the overnight futures, just a day later than I thought, and look how it has handled it so far. Very cool stuff.

Now, did anyone notice that the explosion short-covering rally on the 'news' started right off a great-looking 4-Point CP, right on a key set line and .486 area? I was just sitting there, waiting for the setup to trigger, it did, and then it just went nuts. Another 'coincidence', I'm sure. It always amazes me just how often these coincidences happen. Also notice how that pullback to the top of the set was a .447 retracement to the tick (not shown, you do the work).





Chart created on QCharts, courtesy eSignal

quote:

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Originally posted by jimkane

...Here's my own personal management plan/style in here: staying short side with some (some were triggered off on that last strong bounce)...

...but since we are also on the precipice of a potential big flush down, I want to see how this plays out first before I think about committing to the other side...

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Not a bad move off that pattern, eh? Over 120 handles high to low so far. There is a lot to be said for 'swing' trading, in my opinion.

Just got to love the follow through off this 4-Point CP. Sweet doesn't quite cover it. And today, what a day for the KT methodology. Look at the setup right on an upper // that triggered right before the open. Maybe I'll post that later. And then after a smooth trend that the management I showed in Trailing Stops and Trade Management didn't trigger out for the entire 'wave 3' segment to the 748.25 area, is followed up with an ABCD with an ABCD in the BC leg, with the ABCD balancing with that same set, then three drives down off that to further new lows. How awesome. Not making any claims, just observations.

Now, the word I am hearing from pretty mcuh every chat and blog I follow (a lot of times for contrarian information) is that that was a short-term low, and tomorrow we rocket up. I saw no less than three daytraders get long, take some heat, and hold overnight, they were so sure we will gap up huge tomorrow. I do have some areas here, and it surely is 'oversold' here, but wow, is that some bottom picking with zero entry trigger at all. Just thought it was an interesting thing to point out.

It was also curious that these traders didn't do very well today, as they tried to buy multiple times on the way down. This is not uncommon with many daytraders, they tend to do well in range-trading days, and struggle with trending days. Anyway, after this three drives into this area it would be a huge clue if they can sell this tomorrow, or not bounce it. On the other hand, it would also be something if all the daytraders that held over are rewarded. But, in the long run, 'getting lucky' like that will only reinforce that behavior, and their time will come, playing that way.

Okay, here's that chart.





Chart created on QCharts, courtesy eSignal

So, what's the consensus folks, 99% chance of a strong up day tomorrow? Got to play the overnight now or it will all get blown in a big gap? This is going to be very interesting...

quote:

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Originally posted by jimkane

So, what's the consensus folks, 99% chance of a strong up day tomorrow? Got to play the overnight now or it will all get blown in a big gap? This is going to be very interesting...

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Exactly as suspected. The only thing that surprises me is how all those hold overnight daytraders got their positive reinforcement and made a boatload holding overnight. The interesting thing is how this is a mirror of yesterday's action. Take a look at that. A true two day mirror. A V, with a head and shoulders bottom and all. It's truly rare when something is as obvious as today was, and it still plays out to a 'T'. It is noteworthy how this was the exception to the masses are always wrong. In this case, the masses nailed it dead on, not just those overnight daytraders, but every talking head on TV and every blogger I read. But, it was an awesome day for trading, in my opinion, so who cares.

I agree, T, with pretty much everything you've said. I commented a little in my weekend commentary on the unlikelihood this is a 'bull market', given all the things it is doing that have never been seen at the start of a bull market before. The intermarket dynamics are indeed pointing to the possibility of something big happening soon.

I also agree 100% with the potential doomsday scenario. There was a time when I thought all that stuff was 'crackpot' nonsense. Then I started to think maybe some of it might be true. Now I tend to think I just see no way that we won't crash back into the stone age. I try and try, but I just can't see how it can be avoided. I even think it may be engineered, not simply something that happened because of greed gone wild. I never, ever believed I would ever think something like that, but I also never thought I would ever see even 10% of what I have seen so far. Sure doesn't make me happy or hopeful for all of our futures, as you say, as 'citizens of mankind' :-(

Great market concepts, T.