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.

jarek, I don't see it that way, but if you want to notate it on a chart and post it I could look it over through your eyes.

So, this checks back to a .300/.382/.447 overlap and jumps up. But, is it headed for that 1098/1100 area next, or will it fail at jarek's TL on a lower high 'retest'? Isn't almost 40 points off the low enough for them??? Do they need 50?

I thought about something like this because of 3 points being on the simple line:





But since this is so disproportionate I asked for advice

Okay, I wanted to be sure that was what you were looking at. For me, for a 3D, I have to see a good-sized move, then three quick pushes with symmetry. What you have there is an A+ SL, in my opinion.

Originally posted by jimkane

... What you have there is an A+ SL, in my opinion.

What does A+ stand for?

The best grade you can get an an American school. Grades are A, B, C, D, and F, with each you can get a + or - to indicate the high or low end of that range. A+ is the very highest grade achievable.

Note the ABCD here, with a 4PT in the BC leg. Will it send it up to 1098-1100, or is this a 'W3' and down it goes?

And no, it doesn't have an ABCD in the CD leg, as that is part of the BC leg 4PT.

OK - I forgot that you use letters at school

Here is the ABCD:

But understand, if the bearish .786 ABCD plays out, this little ABCD against it isn't a very high odds premise. That would speak highly for this being a 'W3' down here. So, does your 'context' evaluation say that .786 ABCD was it? Even if it was, do the odds favor downside now, after all that downside already, on this huge up day?

Let me explain a bit. I'm not saying it can't sell below this little ABCD (it just did), only that I would not expect a high probability scenario being a big sell back to the LOD today. The .786 ABCD, if it plays out, implies another new low. I just don't see it today, or even a big giveback today, after all the selling so far. Maybe, but I wouldn't count on it. So, a short I'd have in here would have a smaller premise for intraday (and if it does dump, all the better). That's the concept.

Okay, be very, very careful with this 77.50 area here.

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.