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

... What happened?

I'm not aware of anything important

... but certainly somebody is. Gold rarely moves 1% in 20 minutes

Gold is going nuts.

Next area on ES for me is 1100.

Originally posted by jarek

...Time to move away from this bold ML one way or the other!

And so it does. The lower \\ of this set is currently at 1103 ...

I just saw our comments next to each other. Pretty similar :-)

Yes, 1103 is the 1.272 and lower //, but I'm allowing for an overshoot and 1100 is a round figure they'd like to touch. The question is, will we see it today in a panic sell?

Here's an option expiration week strategy I sometimes consider. This AM I 'looked' at some ATM puts for SPY, that expire Friday. If I expect a good-sized move that day, I can look at these options for high leverage. This strategy will generally do well if the move happens right as expected. Otherwise, they can become a total bust. They were just a fraction over 1.00 when I 'looked' at them. They are now trading over 3.00, for a triple.

Keep in mind a very key higher timeframe upsloping line comes in just below here, and this is close enough in here for it to react any time from now, so keep that in mind. This has been some strong selling, and needs a bounce.

The LOD sits on the line from my longer term set posted on Saturday (bold blue lines). So is the HOD:

Originally posted by jarek

The LOD sits on the line from my longer term set...

It is also in .786-.886 area of the whole rise from yesterday's low to today's high

Same old game, just a different timeframe...

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.