Interesting week ahead with SPX dropping on Friday most in 2 months right from the levels and lines shown by Roofer. Also his old DJIA set suggests that bulls need to be aware:





Quite interestingly Thursday's high was 80 years to the day after the 16 April 1930 top of countertrend rally from 1929-32 bear market

Great posts today, guys. Really nice stuff. Of all days I decide to 'take a day off' from the forum... At least I picked a day when concentrating on the market action was of paramount importance, so in that way my choice was good. What action.

Originally posted by jarek

Jim - would you treat such 4PT with "shortened" 34 leg (hasn't reach the line at usual retracement area) as a sign of weakness ahead?

Click image for original size

jarek, I have some students who love .685 4PT's. I don't mind them, especially when it is just the D point at the .685, as long as the linework supports the area (in this case it strongly does support it). As to whether or not it implies a stronger move off the pattern, I haven't found evidence of this one way or another, but it makes technical sense that that may be the case.

BTW, since I wrote the 4PT article I have firmly decided that the 4PT is a 'degenerate' ABCD, as I alluded to in the article, and hence we can just label it with A-B-C-D like any other ABCD, to make it easier on us and to keep with convention.

OK - I will label all 4PTs as A-B-C-D from now on

it continues to be my''opinion'' that we are in the process of large kane double top abcd before price can push higher..... that is why you see a flood of short sales on my charts....the recent high in no way gave me an''all in '' based on the way i do it.....

as i write, i see at least 15 .886 on gaps..... but on both sides of the market !!!!something has to give!!!

So this nice large ABCD sent it up rather sharply:

... only to form a smaller bearish abcd:

That should be a 'W3' if the bigger and with the trend ABCD is to dominate.

Looks like a 3-4-5 into a key TL here, though, now that the ABCD has been taken out...

Beside the TL there is also one of those Roofer's .886 in the neighborhood. Can it still be an ABCD right into it?

my apologies for showing sloppy work today... i was so eager to get my trade off and get in my yard that i did not dial down and see the micro gap left on open... thus for seventh day running price opened on gap on five, the computers searched out the .886, and that was it for the day... price was off and running..