"The Constitution ... is a mere thing of wax
in the hands of the judiciary
which may twist and shape
into any form they please."

--Thomas Jefferson

UPDATED 20060403

COMMENT #109

CHART #219

(Post close Monday, 20060403)

1. CHART #219 shows weekly prices and updates the weekly CHART shown in the last couple of editions of The $upertrader's Almanac.

2. From the high shown, the market declined in the 8-31-8=47 week movement shown.

3. The movement has been presented as the blue A-B-C movement shown in the CHART.

4. Here we see A=8=C and B about twice the length of A+C=16.

5. From the 2004 low, the market then advanced 24+21+10=55 weeks with 34 up and 21 down (FIBONACCI #s=21, 34 & 55).

6. The movement has been presented in the book as another A-B-C movement as marked in the CHART by the blue A-B-C.

7. From that high, the market then appears to have declined in an a-b-c-x-a-b-c movement.

8. The blue "X" wave high of this complex movement is shown in the CHART by the blue X (see pages 283-92 of "The $upertrader's Reference Manual").

9. The first a-b-c decline measured 10 weeks followed by a 3 week rally to the X wave high, 13 total (FIBONACCI #=13).

10. The second a-b-c decline measured 30 weeks through last week's low so that the total a-b-c-x-a-b-c decline lasted 10-3-30=43 weeks.

11. Here we see c=a X 3.000.

12. The total distance of the movement shown since the high has thus been 47-55-43=145 weeks total (FIBONACCI #=144) with 55 up and 90 down weeks (FIBONACCI #s=55 & 89).

13. At the bottom of the page, we can see how the present level of net commercial long contracts is the highest it's been this century as marked in the CHART by the black horizontal dashed line.

14. We can see five times when the red line has been substantially above the grey dotted horizontal line as marked in the CHART by the green circles.

15. The red box to the very right shows that the current level is a bit over +150,000 contracts.

16. The 178 at the top of the CHART shows that the rally from the low in the lower left corner of the CHART to the high lasted 178 weeks (2 X FIBONACCI #89=178).

17. The green arrows report that last week's low of 145 weeks from the 178 week high puts the two time segments in ratio of 1.228 (SQ RT PHI=1.272).

18. The black #323 in the bottom right corner reports that it has been 323 weeks (178+145) since the low in the lower left corner of the CHART (LUCAS #=322).

19. The ratio of the total movement of 323 weeks to the 145 week decline is, as reported by the green numbers to the right of the CHART, 2.228 (SQ RT 5=2.236).

20. What this suggests is that this market is now in position to set an important low.

UPDATED 20060403

COMMENT #110

CHART #220

(Post close Monday, 20060403)

1. The #220 CHART continues daily prices for the July contract from last week.

2. The important event is the continued increase in the net commercial long position shown in the bottom box.

3. A down channel has now been added after Friday's down day.

4. The yellow highlighting has been added to focus on the approximate equality of the two downlegs shown.

5. The new cycles book has noted an important shift from the October-March book.

6. The green WLC (Weekly Linear Time Cycle Index) projected low from the previous edition is shown by the light green shading at the March low.

7. The addition of recent data has shifted the WLC projected low to the present position seen by the green box in the lower right corner.

8. The red MLC (Monthly Linear Time Cycles Index) projected high remains in the upper right corner.

9. The expectation remains that this market is in the process of making an important bottom.

10. CHART #221 shows daily prices for the continuous spot futures contract in the upper left corner, the December in the upper right, May in the lower left and July in the lower right.

11. When we look at the ones in the left column, it would appear that, from the March high marked by the horizontal red line to the right, price has unfolded in a 1-2-3 sequence (see pages 283-92 of "The $upertrader's Reference Manual").

12. The inability of the green horizontal trendline suggests the possibility that last Thursday's high was but a Wave 4 high and that the market is now in the process of making a final Wavee 5 low from the red horizontal trendline.

13. When we inspect those in the right column, however, a different picture emerges, especially for the December contract which, at the red horizontal trendline high, broke the equivalent early March high seen in the contract in the left column, but also has traded above the green horizontal trendline.

14. The first breach is marked, in the December contract, by the black circle (high shows a higher high above the red line).

15. The second breach is when price traded above the green line.

16. The December contract does not agree with the contracts in the left column, thereby forming an intramarket pattern divergence (see pages 171-84 of "The $upertrader's Reference Manual").

17. The commercial net long position suggests that the decline of 4 trading days to the low shown in the December contract and 6 trading day rally to Thursday's high is likely not a Wave 1-2 sequence which is forming a subset of a much larger downtrend.