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 found some but on a small timeframe, the first one had a really nice
group. But it is ridiculous to post for me at that timeframe real- time as I have delayed quotes.


Mats

Yes, jarek, you can see why I made the post about being cautious right there, and it sure 'saw' the spot. It is going to be interesting how they handle the AA 'news'. I'm sure they will spin it positive somehow. Right now the market doesn't like it, but I've seen that change radically. Still, the comment I made about the big three (AAPL, GOOG, AMZN), combined with this, might be enough for a 'roofer turn'. I'm still highly suspicious, and not at all bearish, but I'm watching as this develops, for sure.

As I said in a previous post, I look at both sides intraday, based on immediate bias, so what I am mentioning is for swing plays, as far as being wildly bullish. Also keep in mind we are on the high end of the range, 'retail' as I like to call it, and I like to buy 'wholesale' (my pullback ABCD's in a trend) and sell retail. So, although I am wildly bullish, that doesn't mean I hold a play as it does a pullback, or that I'm not short on the shorter term as is pulls back. It just means I am looking to buy the pullbacks, not short the pops, on the swing timeframe.

I want to be clear what I mean. There will be plenty of time to short the rips when the turn is in, but until I see confirmation of that, I'm a buy the dips, not short the rips kind of guy. I may shorter term sell the areas that look like it may pull back, if I have enough there, but the trend is still clearly up (hard to deny that at new highs for the entire 'bull'), and I'm staying with that until it stops. That may have been today, it may be in March, or it may not be this year at all. I don't care, I just go with the flow.

Okay, now watch AA to see the level of BS they plan to apply. Closed at 17.45, opened in the aftermarket and dropped to 16.25 quickly, now bouncing, up to 16.82 and rising strongly. This should be getting crushed in my opinion. If this keeps rising, you know the game is still on, and no news short of a third of the entire U.S. being wiped out by a Yellowstone super-volcano eruption or a meteor or something will have any stock selling off.

BTW, 16.81 is the .447 from right before the close to the aftermarket low so far. Not that it will stop them...

Okay, now check this. It hits the .447 within a penny and drops hard, right to the .382/.447 area from the low, and starts right up. Now we see what they really intend. It sure loves those areas.

As I completely suspected, the ES is now 'on the move' again, up three points off its low, already into the gap from the reopening, and now down only two ticks. I suspect it will be up shortly. They sure could care less about what I thought was just an awful report out of AA. The sentiment, and the game, hasn't changed yet.

We have a classic Kane 4PT as a potential driver of downside continuation. Let's see if the sentiment isn't changing here:

Although I agree 100% this is a nice setup, a real possible 'W2' off a top, you guys and your bearish setups are just too funny for me :-)

Someone has to balance here your wildly bullish attitude... :-)

this is jim's forum..he can say what he wants about us personally...meanwhile i will concentrate on showing the power of the tools as ''the machine that grinds''CLASSIC sell on the open.yesterday...target set today on open....

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?