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.

This 77.5 was the last line of defence for bulls with this 1.272 ABCD:

Notice the 5 waves in that CD leg...

Careful now at 82.50-83, that's the bears last chance... It has to roll there. I wouldn't count on it, but that's the line in the sand. We may also be fated to chop in this high end of the range, and maybe a closing burst up and over.

Man, am I seeing the areas, or what? I didn't think they'd have the guts to sell off this spot, but they did.

And now back up they'll run it right off here. I see this as two-way trade right now, no real net buyers or sellers. That may change, and I'll see what they do here, but that's what I suspect.

JIM..yousee them like they are jumping out at you...it was still a very scalpable trade..

This looks wrong for up, this may drop...

Originally posted by EricD

JIM..yousee them like they are jumping out at you...it was still a very scalpable trade..

Oh, I'm all for scalping these. As long as I can see the rhythm and I think I know what it is doing, I see nothing wrong with premises based on these areas.

Originally posted by jimkane

This looks wrong for up, this may drop...

Okay, they came in a bit, to at least make it a horse race.

And up it goes... :-)

And where is it now? And what will it likely do this time around, though?

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.