The first week of 2010 brougth the breakouts to the upside in many important indexes and commodities. From what we follow here copper extended its previous break:



... and crude oil finally broke through the line it unsuccessfully approached so many times in the past:



These are clear breakouts that need to be respected. Barring a fake breakout which on such scale is hardly conceivable, they most probably show the direction of the markets for the coming months irrespective of the fact what majority of us think about the origin of the current rise.

I wouldn't be myself if I haven't found anything for the bearish case for today :-)
For example the recent move up in Gold might be considered as Kane ABCD correction which ended right where it should:



Also the old good Dow is still respecting the lines shown here many times:



What's more there is a possible Elliott count suggesting that the whole rise is very close to completion if not already completed:



This index was recently displaying a typical behavior of Ending Diagonal – it looked pretty strong however barely could make any upside progress. Please note that it ended Friday just 1% higher comparing to where it was at the beginning of December …

Also on our local Warsaw Stock Exchange we have a very high probability setup pointing to the downside. There is a clear The Trade based on DBS where both 1.27 retracements where hit almost to the point, later confirmed by 0.886 after the gap almost to the point and right into the green line:



The ML of the green set, which was very well respected by the price in the past, should now be the target for the decline. Such meaningful drop wouldn’t be possible without major world indexes contributing to the downside. Maybe our small, but very harmonic market is pointing to at least a correction in the current rise?

Yes this run up are unbelivable.
I will see if SPX react on the area around 1163 a level that was so important in the past.

App 1 from first run up sits just under 1163.






Mats

Great posts, guys, and roofer in your topic, as well as those who posted in there, too. I'm really happy to see such efforts.

Okay, GLOBEX has opened, and guess what? It's up, another new 'bull market' high. 1143.75. Hit my upper area as posted last week. But I hardly see that stopping it for long.

Look at gold! 1163! As much as I respect the December high, and all those doing the work on that, I think that down move is over, and new highs will be coming soon. Maybe I'll eat those words big time, but so be it. I'm not into predictions, I'm only in to looking for setups with the current flow, but based on all the intermarket dynamics and what I think is about to unfold, I think gold is just getting started. Time will tell.

Platinum is at another high today for its move, and silver isn't too far from taking out its Dec high. Crude is moving up again, too, flirting with that recent high. We'll see. Either all these things are doing the mothers of all fakeout breakouts, or a big move is under way.

There are a lot of things, many presented in this forum, that imply down is the upcoming direction, but I will say, for now, I am 1,000% on the long side of everything, and will be until such time as I see price moving down. I may miss the exact turn, but that's not an issue to me at all. There will be plenty of time to trade the short side when the time comes, just like there was in Oct 2007. For now, I'm long, it's strong, and nowadays 'long is never wrong'.

Keep in mind what I refer to above is 'swing trading' positions for 2-5 days, maybe a few weeks, perhaps a bit more. Intraday I look at both sides depending on the setup and my immediate bias at that moment.

Another strong burst up. 1146.25...

Crude seven cents from the high of the entire move.

Okay, another new high for the ES, as it looks ready to burst up further, and crude goes ahead and sets the new record for the entire new 'bull'. Euro at a three week high as it clears that congestion off its key line. Same with the DX, as it pushes down once again off its equivalent line. Silver and copper are really moving. If all these aren't reversed sharply, and soon, they are gone, in my opinion. And price-action-wise, they sure aren't acting like that is very likely. I'll still allow for this being the last chance for this to 'top', but time is running out, and I'm looking way higher. We'll see.

And a break out from that congestion to the upside.

I'm just having fun narrating the one man show here :-)

in the end, jim is just expressing what the market already knew based on the tools of this forum..87% of time there would be a new high

astute students would also notice that the lightning trade triggered...

The last post by jarek is especially useful for us here. It is a great 'context' example. That's a primo choice, great looking setup, with many of the factors I look for. But, this is coming off a large flat ABCD which is not only a much bigger pattern, but is also in line with the main trend, which is up. So, would I play a small short setup in here, set up to fade the bigger pattern? Only if I thought the larger setup was likely to fail. I don't feel that here. It may fail, but I surely don't want to fade it. In fact, the long side has been triggered already.

So, how do I read this, what's my play, so to speak? As I mentioned, this triggered beautifully with multiple setups on the way down, as already discussed. It went right to the key area I was watching, and started up. The short side is closed, and the long side triggered. May this roll down to a DT ABCD area, or even be a major top? Sure. But the last eighteen or whatever times it did something like this, and the top callers said the top was in, it went right back to another new high. I want to play that until it breaks.

This means I want to be proven wrong. That means I am playing with the trend until it breaks. There will be plenty of time to play the short side once a top is in. As I discussed and explained several times, this does not mean I never trade the short side, as I felt the last two drops were get setups and plays. It just means when it goes to a likely support area and reacts I'm done with the short side, and back to the long side. I will repeat this until I miss the top. When I close my long side out and it drops down further and all the top callers are laughing at me I'll be smiling. I stayed with my 'Trading Plan'. Then I can start looking on the short side at resistance, and countertrend only back to resistance.

You see, at some point a top will form, and I'll 'miss it'. That's by design. That's what I am trying to do. To look at the one time when a top caller catches the top, and then say the plan should be changed based on that success makes no sense to me. Even a stopped clock is right twice a day. One must account for all the failed attempts and missed trades on the way to catching that turn right at it's inception. It may be a nice trade there, but overall I find it a lot less procuctive than the approach I have been describing.

I say all this not because I am upset with anyone, or anything like that. My 'job' in here is to help people understand the KT methodology. That's all I'm trying to do, explain the philosophy. Make it clear what my approach is. Everyone can trade however they want, but if someone is in here, I assume it is to try to understand more about this methodology. If I see some key concepts aren't being grasped, I will try over and over to make those concepts more clear. That's all I am pointing out here.

The bottom line is, I am not going to trade this little bearish ABCD, I'm already triggered on the long side. If it rolls down on Sunday night, that's fine. At some point this will correct further. If I'm long, I'll be stopped out. The top callers will win this battle, but I think the war will be lost with that approach. I hope this one rolls down. I hope they crush this market, unmercifully. But until they do, I'm going to stay with the trend until proven otherwise, or until I get a big bearish ABCD setup. Along the way there will be areas worth taking shots at, followed down until a reaction happens at support, then it's back to the trend.

And after the fact, if this bearish ABCD here plays out fantastically, would my opinion change? Not at all. One case doesn't matter, only the aggregate. One of these bearish patterns will follow through, but the point is follow the odds, not the one case. And that all depends on the 'context'. If I thought an intermediate top was in, I'd already be short and holding here. If I thought the 'context' favored the resumption of the uptrend off this big pattern, I'd be long. But to start a new short this far down on that small of a bounce, right on support, that doesn't make sense for me, 'context'-wise. Make sense, I hope?