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.

Should bounce in here.

If that's all it can bounce, it's dead meat, in my opinion. Staying short side bias.

That low may be significant. My next area is around 25, but one line comes in just below that low at 28.25, and they really 'saw' it. I'm watching to see if they keep squirting it up, or of they roll it over for another push to 25. I'm not saying 25 will hold, only that it is an area. And I'm not saying that might not be it there at 28.25. I think it very well may be it for now. I'm just mentioning what I am watching, then I see how it acts and I can respond accordingly.

Think poker. It's never about knowing what the next card will be, or predicting it. It's about knowing the odds, and then responding to what cards appear, and what your opponents do at each step. It's a step-by-step adjustment process in your reactions based on what unfolds during the entire process. Think that way. That's why I point out areas. It's like me saying 'Okay, watch what this next card is', and 'Okay, watch what your opponent does when he sees the card, his body language, his play, etc.' It's just like that. Then you respond to what you see.

Rolling over at .300/.447 at key line, but watch in here. It 'should' flush, but when they plan to reverse it, it frequently rushes down to the .786 or .886, looking all weak, and then they gun it up hard. It's something I watch for, for clues.

They couldn't even get it down to a .685 before gunning it. That's strong. Watch the ABCD coming up in here, but I susepct that's it for now on the downside. The ABCD will tell me a lot.

I'm looking at 39 next if they overcome this ABCD, then 42ish.

Watch this small bearish ABCD in crude here for clues. I don't think it will play out, and that tells us something if it doesn't. Note crude and ES moving in tandom.

Exactly as I said.

So this might have already been our W2 of the move off the big ABCD:




My concern is that if yesterday's low was not point C of the EXP ABCD but the end of the first leg down, then the last leg up of W2 is still in front of us

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.