Here is the update of my recent charts for gold and rates:






Interestingly they share pretty similar characteristics:
- both issues were recently rising strongly which may seem contradictory, but as Jim pointed out might suggest inflation expectations
- both reached 1.27 external retracement of their respective smaller Kane patterns
- in both cases 1.27 retracement of their bigger Kane patters is still much higher what suggests that gold and rates should continue to rise together for some time to come

jarek-please do no read too much into it....forcasts are forcasts, the tools come first....last year the model worked well.before 2009 began it forcast an important lowin early march and the most important swing low as july 10th, saying if the july low was higher than the marchlow, it would be very bullish until mid late october...kane tools confirmed at july low with endless abcd's completing at .382....the model is not positive for the rest of year...hard for me to accept....but for my own trading i am on edge for a short sharp selloff...

It's liking that ABCD so far. Just got to wait for the setups, as we've seen time and again. And where is it now? Decision time, CD leg, or 'W3'?

This 88 area here with this bullish ABCD is really critical. What it does with this will be a big clue. This needs to sell off hard real bad, but it's hard for it when it is being manipulated up. Any clue they are letting it go for now and I'll be ready to pounce on it. Until then, same old approach.

Today we have a great example of KT logic implementation in ES. My .382 ABCD from yesterday was hit to the tick:



The question remained, as Jim pointed out, if the drop from yesterday was a CD leg or W3. There were 3 hints suggesting the latter before the actual break of point D low:
- first thrust up to 1192 was a bit short as for start of something more serious to the upside
- second thrust to 1192.75 created a nice Kane ABCD from the low
- first thrust down from this smaller abcd was of right size and was perfectly corrected by .886

At this point the chances for breaking the overnight low were in my opinion pretty significant.

We know that Kane ABCD at .382 is a great setup. If setups like this fail they usually fail badly. If we don't see this today it would mean that somebody is still willing to give this market an invisible helpfull hand ...

Nice work, jarek. I'd keep that eye well open for that 'invisible hand'...

Okay, key area here around 92. Let's see if they check it back, then up to new highs, or if they roll it. Big clue, IMO.

Originally posted by jimkane

... key area here around 92...

Is this important because of the downsloping TL?

Among quite a few other things I'd rather not post, yes, that's a key line to point to the area. That, and 5 waves up from the LOD into the area.

But, I'd watch for that 'invisible hand'...

As I suspected (and constructed my plan around, of course)...

I have a secondary sub-level at 93 (really this is just the upper boundary of the same area), with more lines and such, so be very, very cautious here as this hits 93, it may be a 'stretch and dump'. Just something to keep in mind.