APRIL COMMENTS
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Comment numbers for 20060404 111
GENERAL COMMENTS
"It would indeed be ironic if,
in the name of national defense,
we would sanction the subversion of one of the liberties . . .
which makes the defense of the Nation worthwhile."
- United States v. Robel, 389 US 258, 264 (1967)
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1. We always want to be aware of those projected turning points on page 368 of "The 2006 $upertrader's Almanac - 1st Half Edition".
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CURRENT COMMENTS
"Few men have virtue to withstand the highest bidder." UPDATED 20060404
COMMENT #111
CHART #s 222 & 223
1. CHART #s 222 & 223 show weekly prices and update the perspective presented in the last couple of editions of "The $upertrader's Almanac" (see the information after the "ALIGNMENTS" section at the back of the book).
2. The interpretation presented in these CHARTS echoes the very bearish interpretation presented in the book.
3. That interpretation is the Elliott Wave pattern carried forth in today's #222 and 223 CHARTS (see pages 283-92 of "The $upertrader's Reference Manual").
4. The interpretation presented in the book was the maximum bearish interpretation allowable.
5. The two CHART #s 222 & 223 show the same update of the current structure of the market, but only for the last 3 or so years in the #223 CHART and 8 in the #222 CHART.
6. One of the interesting features of the #222 CHART over the last 8 years or so is the level of the net long commercial position shown at the bottom of the CHART.
7. Here we see that the extreme bullish position of the market presented in yesterday's COMMENTS is not being ratified, thereby producing a contradictory expectation between the two markets with respect to this one indicator.
8. The book shows a price / momentum divergence at the 2005 high (see pages 171-84 of "The $upertrader's Reference Manual").
9. We can see how that price / momentum oscillator divergence is now being reversed, suggesting now a bottom just as the divergence was suggesting a top at the 2005 high.
10. That CHART in the book was actually a replay of the following from the CHART service last summer:
11. This is how the high had formed on the daily CHART by moving up into the colored boxes in the upper right corner of the CHART:
12. In the #222 CHART, from the 1998 high, we can see how the market declined to the 2000 low and then rallied to the 2003 high shown in the CHART.
13. The numbers at the red lines at the bottom of the CHART show that this down-up movement lasted 245 weeks (2 X LUCAS #123=246) and that this is the 146th week since (FIBONACCI #=144).
14. The black number in the lower right corner below the red lines shows that the total amount of time spent in this movement of the last 8 years is 391 weeks through this week.
15. And yet, through all that has happened, the market is but about the exact same price level as it was at the time the movement began in 1998.
16. When we look at the relationships of these time segments in the leftmost black text below price that begins "1998 HI TO 2002 HI … " we see that the three relationships reported are all in PHI proportions.
17. Here we see a 67 week decline and 178 week advance, 245 total (2 X FIBONACCI #34=68, 2 X FIBONACCI #89=178 and 2 X LUCAS #123=246).
18. When we look at the relationships of these time segments in the leftmost black text above price that begins "1998 HI TO 2002 LO … " we see that the three relationships reported are also all in PHI proportions.
19. The 178 week advance appears to have unfolded in a 93-20-65 week affair (FIBONACCI #s = 21 & 89 and 2 X FIBONACCI #34=68).
20. In terms of price, the two advancing segments of 93 and 65 weeks of this movement are almost exactly equal.
21. To the right of the 2003 high shown in the #222 CHART, we see that the advance to the 2003 high from the 2000 low of 178 weeks versus the 146 week decline since to this week's low lasted 324 weeks total (2 X FIBONACCI #89=178, FIBONACCI #=144 and LUCAS #=322).
22. The black text below price and to the right shows that these segments are also in PHI relationships.
23. Directly below, we can see that the 146 week to the present week from the 2003 high has formed a 47-55-44=146 week movement.
24. The center of the movement seems to be the up-down-up affair from the 2004 low to the 2005 high.
25. This movement is marked by the three red dots shown in the CHART.
26. This 55 week segment (FIBONACCI #=55) is shown as consisting of an 18-27-10=55 week structure with 28 up and 27 down weeks as shown in the CHART.
27. The interpretation suggests that the movement is better seen as an a-b-c movement than the blue 1-2-1-2 interpretation shown in the CHART.
28. This interpretation is shown in the #223 CHART of weekly prices at the bottom of the CHART as an alternative.
29. One of the reasons for this interpretation is the decline from the 2005 high.
30. If this movement were to be a true blue Wave 2 high as shown in the CHART, the market should have begun a Wave 3 of 3 decline at the 2005 and unfolded in a more-implosive decline than the one shown (unless, of course, the market is yet to accelerate to the downside).
31. When we consider this 47-55-44=146 week movement shown by the "Alternative" interpretation at the bottom of the CHART, we see 55 up, 91 down and 146 total weeks in the movement (FIBONACCI #s=55, 89 & 144).
32. The black text in the lower left corner titled "2003 HI to WK #14 LOW" (this week) shows that these segments are also in PHI proportions.
33. The red dotted line shows the 50 percent price retracement level of the 178 week advance.
34. We can see how extremely choppy this market has been over the last 3 years or so as may be seen by the many overlaps.
35. If the 178 week advance to the 2003 high is a 3-legged affair, and the 146 week action since also appears as choppy and corrective, then what is suggested as a possibility is that the market is in some sort of a very long sideways correction.
36. The back-to-back experience of the 178 and 146 week 3-legged segments suggests a situation similar to what we just did highlight this last week which is the series of 3-legged movements marked in the following CHART by the two thick green lines that formed the sideways triangle shown in the CHART:
37. In developing the possibility that such is what is actually happening in this market is seen by comparing the 1998 to 2000 decline in the weekly #222 CHART below with the decline to the 902 low in the above CHART; 2 legged rally to the 2003 high in the weekly CHART below versus the rise to the November high above.
38. The expected current low this week would then be seen to be the equivalent of the blue Wave B low in January of 2006 in the above CHART.
2. We always want to be aware of those "Inversion Cycle Indexes" in the weekly pages of the April through September edition of "The 2006 $upertrader's Book of Linear Time Cycles" which is available in an easy-to-use electronic format. A sample of the format for the charting file may be seen in the NOTICE posted here. Ordering information here!
3. The initial issue of the free "Trading on the Edge" E-Zine was released 20001021. Archived copies are available here. Subscription information here.
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~~George Washington
