"I think there is a world market
for maybe five computers."

--Thomas Watson, President of IBM, 1943

UPDATED 20060505

COMMENT #155

CHART #s 307-314

1. In the fall of 2004, a pattern had developed that related to the following information seen in "The 2006 $upertrader's Almanac - 1st Half Edition":

2. By the end of the year, the information was being marked on the CHARTS.

3. An example is seen by the green up arrows in the following CHART of daily priced for the December contract:

4. The most volatile effect was shown here as the information was anticipated …

5. … and then here after the information had affected price.

6. The pattern continued for several more months.

7. But just as linear cycles fade in and out, so does the effect of such information, so that, over the next few couple of months, the effect was relegated to much lesser status as the importance of the strong uptrend dominated price action.

8. Nevertheless, we can see how the April and May lows were still influenced by this information.

9. Further, the June high shown in the CHART was most definitely influenced by the information.

10. We can see in this recent CHART that the major turn in September occurred right as this information became known.

11. Prices have not been higher since.

12. Further, the November lows shown in the CHART also occurred as this information was becoming known.

13. The following CHART anticipated the November low:

14. Subsequent price action and establishment of the low is shown here:

15. But over the next few months, this information became less and less important and has thus not been highlighted of late.

16. Today's CHART #309 shows hourly prices for the June contract and updates recent discussion.

17. The CHART is presented because of the market's ability to extend the movement three more hours and one more tick.

18. Interestingly, these seeming inconsequential movements have actually brought a few of the measurements into more pristine alignment.

19. For example, a incredible, almost elephantitus-like extension from the blue Wave 4 high shown in the CHART is believed to have occurred as shown by the green diagonal triangle lines.

20. The CHART shows that the movement to the blue Wave 4 high and from that high to the low shown in the lower right corner unfolded over 89 & 144 hours, 233 total (FIBONACCI #s=89, 144 & 233).

21. These segments are marked in the CHART by the yellow highlighting.

22. From the low, the initial seemingly minuscule surge upwards is seen (see pages 283-92 of "The $upertrader's Reference Manual").

23. Let's look at a CHART of overnight hourly prices for the June contract and see if it ratifies the above interpretation.

24. This CHART is shown in #310.

25. Here we again see the pattern as having developed as in the day session CHARTS.

26. In the #311 CHART of hourly overnight session prices for the June contract, we zoom in a little on the previous CHART.

27. From the black Wave 4 high, we can see that a second diagonal triangle is suggested by the thin green lines shown.

28. In CHART #312, we inspect the sister market to see if the same action is suggested.

29. Here we again see similar suggested bottoming action.

30. The decline is seen as having unfolded in the blue numbered sequence shown with the 5th wave decline being equal to the 1st in price.

31. The blue 3rd, on the other hand, may be seen to have extended greatly versus the blue 1st & 5th and to have unfolded in the black 5 wave sequence with the 3rd and 5th of equal price length and the 3rd about .786 X the black Wave 1 decline (1/SQ RT PHI=.786).

32. In the lower right corner, we can see the more traditional decending diagonal triangle as marked in the CHART by the green lines.

33. Though not as massive as in the former market, the pattern is still seen and is still suggesting of bottoming price action.

34. The red sloping line in the bottom box shows how such momentum oscillators as RSI and Slow Stochastics are diverging with price, thereby forming an important price/momentum oscillator divergence (see pages 171-84 of "The $upertrader's Reference Manual").

35. In CHART #313, 15 minute bars are shown through this morning.

36. The action, so far, appears to be but a 3-legged affair as shown by the blue and black numbers.

37. In the ideal world, price does not break the pink horizontal line drawn at the black Wave 1 high and follows through late in the day to the high side.

38. CHART #314 shows daily prices and updates the CHART from 4 days ago.

39. We can see the new lows in the two markets in the top row that we've been discussing.

40. The new lows are shown by the red down sloping down trendlines.

41. But note the bottom row.

42. Here we see that the lows of a couple of weeks ago are still holding.

43. In fact, the markets just this morning broke above the pink horizontal trendlines shown, thereby triggering the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual".

44. This type price action is suggestive of Wave 1-2 movement which suggests that the market now is in a Wave 3 advance.

45. The one in the lower right corner, in fact, suggests a 1 trading day price advance and then a 2-1-1=4 day correction, 5 trading days total (FIBONACCI #=5).

46. The net of all this is that price appears to have bottomed in this complex.