The developments of the last 2 trading days make me consider the whole rise from the post crash bottom to the last week's high as a W2 Kane ABCD:





Timewise it doesn't look good because it rarely happens in a zigzag that CD leg lasts 80 times longer that AB leg. But if it comes to proportions - it's almost perfect: AB and CD legs are nearly equal and whole ABCD retraces between .685 and .786 of the preceding leg down from the top.

Initially I thought that whole zigzag should finish at May 11th high. Now I see that high as a C point of a W4 correction in the CD leg:





The behaviour of the market in the next couple of days should help us jugde whether this interpretation is correct. This is rather important because in such case we should expect a drop to at least 1020 (1.272 external retracement of the ABCD) and probably much lower if W3 down has just started.

... and yet the area was good only for a "shortened" version of 4PT:





Those sellers are in real hurry!

This might have been just a backtest of this broken ML. But if this bearish .382 EXP ABCD fails than bulls will finally get some ground:

These sellers are relentless. I love it. That pattern you showed went back to the low, then up, now a flat/4PT hybrid. But this is all potentially 'basing' action in here, unless they can flush it down a bit. The moves, though, are big and smooth, and fantastic for short-term trading.

Originally posted by jimkane

These sellers are relentless...

But buyers do not give up either. Would you describe today's move as clearly impulsive to the downside?

I'd call it slightly labored impulsive. Just good, solid trend move, slow and orderly. It sure isn't even remotely corrective looking.

Closing sitting on this key upsloping line is important.

Yep - I see the set(s). The size of the decline compares here to Jun-July and Jan-Feb drops. But hasn't the panic low diminished the importance of this comparisons?

OF COURSE GOLD WENT NUTS...EVERY STINKIN' COMPUTER KNOWS THIS SETUP!IT WENT RIGHT TO THE 90% TARGET.... THEY ALL CASHED IN... AND THAT WAS THAT!it is all just a geometric game, to be played well or poorly....the line sorting fib setup has been absent from the market recently....i do not think i will ever figure outTHE WHY of why for a month a trader can hit a setup almost every day.. and then it is gone....

even with my early depature, the tools rocked today and i have no regrets....

Futures now down another 8.75. I wonder how those puts will look tomorrow? I think that 1100 area should be hit well before the morning.

Here is how beautiful the price action in SPX respects the set based on potential Waves 1 and 2 of the move from the top. The panic low makes this set pretty steep:

I suspect a big run up in GLOBEX and a huge gap up over that line. We'll see. The weekends are getting longer and longer as the inevitable blowup gets closer.