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.

watching this market coil down..have next area at 75.5-73.75..

Originally posted by jimkane

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

Think about my wording...

.382/447..line.

Originally posted by jimkane

Originally posted by jimkane

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

Think about my wording...

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

It will likely not react off the expected area because everyone can see the rhythm at that point.

Any chance that was a flat/EXP hybrid 'W2' there to set up a dump from the big .786 ABCD? It fits, but I consider it low probability. I think they want to hold these gains. Maybe not, but I think chop is most likely. It could also drop into an ABCD.

Don't get me wrong, intraday I'm short side bias at the moment, but I am not holding out much hope for a trend starting. It may, and that would be great, all I can do is position for it, but I'm not thinking giving back the gains is high probability.

If the market did dump here and get anywhere near the lows, I would say that is an ominous warning sign of 'impending doom'.

Okay, this has dumped more now than I expected. Watch the 1.272 and the ABCD area to see if they pick it up. If not, KIG.

Less than two ticks from the 1.272 and here they come. What they can do now is critical.

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.