Together with Jim I'm in the inflation camp now and believe that March 2009 - April 2010 rise was the W1 of the new multiyear bull market. The question is: can it move up from here with no looking back or it needs to "refuel" before commencing W3 up in earnest?
From what I see on various blogs and sites there are still many W3 down callers despite yesterday's taking out of August top by SPX. The chances are high that many others will join them soon if the market starts to fall impulsively from here in the following scenario:




At the end of such bullish ABCD the market should be ready for a major move up. Especially that those W3 down callers would be allowed to hang on for many more months to come if the most probable scenario developes:




Could you imagine the amount of fuel they could provide in such scenario?

You know they are scared of an area when it hacks and chops like crazy, the old HC^2, right at the area. When it is also a battle area between two dueling ABCD's, it's all the more significant to me. Very interesting. My opening range work also shows a drop below here would imply trending into the close. They don't want this to happen.

Originally posted by jimkane

You know they are scared of an area when it hacks and chops like crazy, the old HC^2, right at the area. When it is also a battle area between two dueling ABCD's, it's all the more significant to me. Very interesting. My opening range work also shows a drop below here would imply trending into the close. They don't want this to happen.

...and there was light.

Notice the ABCD here, as a potential CD leg of a DB ABCD. Just something to keep an eye on. I don't think they'd have worked this hard to just let it roll over, though. But, I do have respect for the structure as I watch this here.

If this is the move off the bigger bullish ABCD then it should accelerate to the upside here since this would be W3(3):

It may, though, be W1(3), if that is a W2 ABCD there (technically, since the B point didn't go below the start of W1, it is okay, not to mention I am a dissenting believer that W2 can actually go below the start of W1 under certain circumstances). Hence, it could be due for a W2 right in here...

But, before too many readers get confused by all these wave counts, they are not critical to trading the KT methodology. It's just some fun jarek and I have looking at various scenarios. For trading I look at trend, 'context', and find the areas using the techniques. I then make a decision and sit on something until technical clues tell me it's over.

Very interesting reaction off that double ABCD area...

And right in to a DT ABCD, 1.618 to the tick, and a reaction off it.

I do have to point out that when I see action like this it happens when they can't seem to trend it, so they just hit pattern and area after pattern and area, producing small reactions (usually smaller and smaller), until the energy coil builds up enough to give them the juice to explode it out.

Now, notice it took out the potential DT ABCD, took out an obvious TL, and is now approaching the Game Zone. Does it roll to new lows, to the 1.272 area, as one would expect, or do they game it once again, as they know this low is a critical one (go back to jarek's TL that I pointed out)???

Jim - do you allow for DB ABCD with a clear ABCD in its CD leg?

Right back to the line. Totally not able to handle that area. Very surprising.