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 jimkane

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'.

Well, they took it straight to the low 40's. And they are making it look strong. Perfect scenario...

This may not roll over, but I wanted to point out the concept anyway. My main spot is around 47. After that, I see only upside.

The heartbreaker is that they are starting this out dead off my area to the tick, but they are likely just getting my hopes up. We'll see. Not too many bears out there even short-term off this spot. That's good, though.

Sitting right on the price flow line here. Do or die. Watch for a stop run head fake and then up hard, in case.

Stops fully hit. Now we see. A backtest and drop would be ideal, but it might be over here if the setup is not to play out.

It's teasing me. Right to the backtest, and a reaction. But I don't see real sellers yet. It may bounce more and roll, but I'm not convinced. Too bad, this area is ideal for the bigger ABCD scenario jarek and I have been discussing to continue from. We'll see. Sometimes it takes a while for them to clear 'em out before it can move.

Very dangerous move there, after the backtest it sets a new low with end of move looking action, and starts to bounce hard. Yes, I can look at the TD and EXP areas here, but it's looking ready to explode up, end of down move. Just as I suspected. Nice, but just a tease, I think.

EXP last chance here. I say it most likely explodes up from here.

They took it up to the .618 and line, and then a new LOD :-) Will any sellers really show up, I still doubt it, but I'm going with the area and just being skeptical all the way.

Note the 1.272 here at a SL with 4 contacts points, which could also be a lower //. This could send it up...

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.