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.

Originally posted by jarek

But wasn't LOD a good spot for the first wave off our big ABCD to finish? :-)

Oh, yeah, wink, wink :-)

A great scenario would be a bounce to the low 40's, then dump hard to new lows for the entire move since the 'top'.

But you won't see me crying if we just dump to new lows from here :-)

It could also bounce to as much as .786 of this first leg down, where a very nice setup is forming:

... but first it needs to overcome this bearish TD ABCD:

gld offered multiple chances yesterday to rebuild my position to a full short...so i did... again, the tools of this forum are the best i know at catching the maximum number of traders looking wrong way at extremes....all the talk was about ''the breakout to new highs''.. the geometry gave the short with a risk of 25 cents...

all i can do is use the geometry of the markets to prepare and act... my order is in the market.....

fyi,yesterday offered the lowest number of trades of any day this year based on the geometry i trade... i only found six trades to trade...

Nice Kane DB ABCD yesterday.

Al Kamego

Nice work, guys.

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.