I continue to believe that the move down off our big bearish Kane ABCD isn't finished yet because it hasn't reached 1.272 external retracement of that ABCD. Therefore I still look for a potential W4 correction of that move in the form of a sharp zigzag. My downsloping warning line was breached on Friday but there is a downsloping set suggesting that Friday's high could have marked the end of such zigzag. There was a clear retest of the line before the end of the session so it looks quite interesting:

to be resolved.....

Originally posted by jimkane

...I still can't see anything but 25-30 points up on the fake jobs report, even though we all know, and the market knows what the fake number will be. How can the market react to something that is well broadcast and should already be priced in??? Yet I feel it will. Anything but big up tomorrow is going to shock me. But, you never know.

I live to be shocked :-) I feel a little funny because we have some new people in here, and especially with potential launguage barriers, they may not realize a lot of what I say is meant to be sarcastic, to make specific points. I think even some of my advanced students don't get what I am doing (as far as trying to get one to think) in a lot of the posts. Although in reality I did think the scenario of big up on a fake report was possible, and would leave me shaking my head, the geometry said down (look back at my posts mentioning the grind up, the geometry, what happened last time with that, and that being the last area to 'test' that ABCD and for that great setup and scenario to still be vaild), and the concept of buy the rumor, buy the news (instead of buy the rumor, sell the news) was just too much for even this fake market.

Now, the super-critical thing is the key line here which comes in just as a bigger flat ABCD comes together. This has the potential to be a big 'W2' here and send this up in a powerful 'W3'. For the bearish scenario to play out this must fail in here. It doesn't mean it can't bounce and roll, but the area must give way. I'd prefer it gives way straight away and not bounce, but if this gets too 'oversold', and the down trend gets too unhealthy, without corrections, it may not be sustainable. And with a 3-4-5 look to this, a bounce is possible. But, a major flush on a Friday into the close is surely a possibility, too. As an aside, I did not give up my bearish bias on a swing basis on that rise.

Thanks Jim for that post...I try to study and pick up bits of information in your thought process. I am not going to lie and say when you said" ...I still can't see anything but 25-30 points up on the fake jobs report"..it does make my subconscious come into play and say Jim sees the odds based on up. I also know you play the setups at each moment in time . I have to just focus on the context and play what is given to me.

I'm sorry, everyone, that sometimes what I say also needs to be 'context interpreted', but if I don't do it that way, then I'm just spoon feeding people the 'answers', not trying to teach them to think. As I mention to people reading the members' archive on the website, I am always trying to make points, each rambling is not without a specific purpose. So it is in here with many of my statements. What am I saying, why am I saying it, what is the 'context' (not just of the market, but of the statement), and so on. I teach how I teach.

I feel I am offering up something quite different with my methodology as taught by me, and it requires a lot of critical thinking. I am trying to teach that, and I do it how I do it. In the long run I suspect many will look back and understand why I do things the way I do, for the 'long run' results, especially in critical thinking skills, which are a big part of this methodology. For those that want simple, easy, quick, no thinking 'skills', that's for the run-of-the-mill vendor.

BTW, everyone notice the small bearish ABCD here? This will be a big clue, as this is acting sold out for now. Watch to see if it pulls back to a typical area and then takes it out to the upside, or not.

Okay, there was the pullback right to the typical area, and up it starts. Let's see if it follows through, or rolls over.

Jim I have a question...when you say clue time does it means you are looking for possible scenarios to play out and when they don't follow their usual script it is a tell for the direction. Now if you think the LOD of is in and odds favor a bounce, then you wouldn't take that bearish ABCD setup. Doesn"t the methodolgy play for each trend setup or is this where the discretionart aspect come in?

This is an awesome opportunity to see what I am talking about. One should be able to see why the pullback area was typical, using the methodology. It then bounces up, and I say watch to see if it follows through or rolls over. It bounces up to the exact spot I'd worry about most for a rollover, and rolls hard, and sets the new LOD. Clues. At a very nominal new LOD it starts to bounce. The premise is it is 'sold out', but I am also keeping in mind it has the flush potential, and with the 'flash crash' broken market dynamics out there, anything could happen, even something big. My goal is to stay with the short side bias, in case it isn't sold out, but watch clues to see when I should abandon that, if only on an intraday basis.

Originally posted by EricD

Jim I have a question...when you say clue time does it means you are looking for possible scenarios to play out and when they don't follow their usual script it is a tell for the direction. Now if you think the LOD of is in and odds favor a bounce, then you wouldn't take that bearish ABCD setup. Doesn"t the methodolgy play for each trend setup or is this where the discretionart aspect come in?

Most of the time I am in one of two situations, I'm either looking to trade, or in a trade and looking to manage it. In this case, this has sold a lot today, and it is too late for me to open a new position for the short side on such a small correction. If I truly felt it was going to continue down I might use such a small pattern, but mostly it's too far down for that. If I'm in management mode and trying to milk some of the position, I want to read clues to see if it is behaving like I'd expect for up, or for down. It coils itself into a decision point, in this case by reacting to both the first area off the ABCD, and then a typical bearish 'W2' area, and that puts it in the decision coil spot.

It decided down. I am inclined to stay with the short side intraday. It then hits the nominal new LOD, which, if the premise is it isn't likely going to sell much more, it should bounce up, as it was mostly just a stop run and test of the area. Then I can repeat the process, see where it bounces to, how it acts there, and so on. Look what it does and form some premises. If the LOD area is a PTA, then I'm looking for triggers, but that's an entirely different game.

So, this should answer your question, but here's a final thought. The point of 'context' for me, to a great extent, is to filter out setups. Say a big ABCD setup sends me down, and it hits a key 1.272 area and line convergence. It then bounces up in a small ABCD. The trend is down, I have a bearish ABCD. Why not hit it? Let's say the other trade is closed now, or it was missed for some reason. The answer for me is no, I'd almost never trade that. Big trend down, at potential support, tiny little pattern. It needs a bigger correction. The 'context' filtered that one out for me.

Suppose on the higher timeframe this area also has a key .382/.447 convergence and a key upsloping line, maybe even a pattern there. Would I hit that small bearish ABCD? Not in a million years. Yet it may be a near perfect ABCD at a key area in a smooth downtrend, and when viewed out of 'context' it looks fantastic. Many setups look great but 'context' filters them out for me. In that case I use the patterns for clues, to see if perhaps the area may not hold (in which case I may stay with some of an exisiting trade), or they may fail, indicating to me the area is more likely to hold, as something that had a chance to take the area out couldn't do it. And so on.

Key area here, with a 3-4-5 ending look to it. So, I will watch the bounce areas and see what it does with them. That will give me clues. If I'm still short intraday I do this to see where to call it quits with the remaining position. If I got triggered long because this is a PTA, I use the areas to see how the long is acting, and to see what it 'sees', to get a handle on that premise.

This does have a bit of a look that it may sell hard if they can't do something with it soon. Normally it is set up here to chop until close, or rise. But being a Friday afternoon and its inability to rise off finishing type moves has me thinking they could hammer it. I have no way to know, but it is acting enough like it that I, personally, would want to stay positioned for this, even if it would cost me a bit to do it. That's just my take, my view on this.

traders here know i trade a stack of charts in groups of ten to look beyond the indexes to see if the parts support a bias in the market.. especially before a big report i ask the cold hard question strictly based on the geometry...'' is the geometry of sell or buy in place on the previous days close.. so that no matter how ''good or bad'' the news, the computers already know how they will react?''then i ask after the initial reaction on the open'' does any additional geometry, usually an 886 on gap at line, support a continued push all day in one direction...?''here is a glimpse of my charts... note KLAC is an old favorite of jim's... the dbs was just waiting to blast.