Hello everybody. I've just returned from my vacations and I wonder what happened to this forum while I was away... I haven't done any analysis yet but I'll start the topic anyway since it looks like nobody else is willing to do it.

Originally posted by jimkane

...How the market handles this will be a big clue. To date, the standard response is to run it right back up. If they don't do this, that's a clue.

Notice gold. They dropped it hard on the IMF announcement of gold sales, yet those were known to the market. All they did was confirm the final leg of the sales they've been doing and had already disclosed. The result? Gold went right back up as fast as they dropped it. This news about the discount rate was already known to the market. So, if there isn't a sentiment change, this should run right back up in a similar fashion...

Not tooting my own horn, but pretty damn impressive, my read on this. Look at gold, right back up. Look at silver, an explosion up and well over. Look at the market, another new high for this move up, well over the high yesterday when the news came out. Look at how close the $RUT and $MID are to new highs for the entire 'bull'. All exactly as I suspected. Risk on. No reason to think otherwise.

Yes, maybe this is it right here at this high. How many times have we heard that? Yes, I will be 'wrong' at some point making them prove it to me. But the methodology requires me to be 'wrong' like that. That's a good thing. And it's an important concept to grasp. As I said, I'm sticking to the long side, and although I sure wondered how they would be able to run this back up (I mentioned to one student that I had to wait for Europe to open to see how this would be handled, and we sure saw when they opened how it was handled), trusting the methodology 'paid off' once again. Just my two cents, folks.

P.S. I just heard foreclosures just hit an all-time record (that implies higher than during the great depression???), and the market is up, out of a big hole. Risk on.

Notice the $MID, in the .786/.886 zone, has a triple line convergence right in here. If it ever were going to give it up before hitting a new high, this would be the spot (understand it is now under 15 points from a new high for the entire 'bull market'). I'd be surprised if it didn't come back in at least a bit. And when it does, all the 'W2'ers and top callers will call it a failed retest... And Jim will be looking for .382/.447 long-side setups. Sure, I'll be 'wrong' eventually. Maybe this time. But if I persisted on the short side I wouldn't have been long side bias from just over 1040 to just over 1110, a 70 point rise (or the 8.7% rise so far in the $MID). Yes, top callers will be right here and there, but in the meantime, I'd prefer to be on the 'right' side of all these 40, 50, 70 point moves, both up and down.

Did everyone see the standard ABCD at 5:56 AM, and the EXP ABCD at 10:01-06? There was also a smaller nice TD ABCD just after that. Lots of chances to get long if one didn't get in off the primary 'base' area of support.

Notice the 1.272 at the HOD today, from the HOD yesterday and the big drop. Intraday I have a very short-term short bias off that high, watching and in management mode on the ES in here. Keeping a very close eye on the area from here (around 1106.50-07) to around 1105.50-.75. The reason for having interest in such a play? The HOD is a potential area (just look at the $MID), and after such a run up a long side play has done well. If it triggers to the downside one can be positioned if it does do anything big off the area, and otherwise, just keep the downside bias until the next key support area is hit, and see what it does. For call plays, nothing changes, that timeframe says long side bias and that's all. I hope these explanations are helping with the understanding of my thinking.

yes ..very clear..

So, it 'saw' the area I mentioned, bounced ever so slightly, not enough to indicate any action be taken, and then dropped like a rock. How nice is all that? Posted my thoughts and reasoning so all can see what I am thinking and watch as things unfold. Now I want to watch in here. Although the C point is really too shallow for this to be an ABCD, I still want to watch as this pseudo-ABCD comes together in here with Fibs and lines. I want to see what it does in here next.

And lo and behold, it starts up. Big surprise. The area was clear. Now set up the areas where it may bounce to, and see how it acts there. Keep in mind, the decision does not come from what it does at the various areas, the decision is based on the 'context', the 'bias' if you will. What it does at the areas says 'yes' or 'no' to the premise. If you don't understand that concept, you are missing a big piece of the puzzle, and you better study that.

Okay, 1107.75 here, this is the first key spot. Let's see...

I would suspect this area, which is smaller than the ABCD, will not stop this from rising. It 'should' check it back, but it's acting like it probably won't even do that.

And no sooner did I post that than it exploded over the area. To me it verifies that it was an area because the break above caused that 'illiquidity pop' you frequently see when a key stop run swing point gets taken out.

Jim,

I really appreciate your posts and I think they are very useful. I like to read them & try to things out.

Al Kamego