MAY COMMENTS
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Comment numbers for 20060510 160
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
"When man undertakes to be God's avenger, UPDATED 20060510
COMMENT #160
CHART #s 328-330
1. We can see, in early March in CHART #328 of daily prices for the continuous spot futures contract, that this market was setting up a head-and-shoulders topping formation as indicated by the three red caps.
2. This formation was rather ideal in this market in that the left and right shoulders were each 29 trading days from the hear (LUCAS #=29).
3. However, at the same time, a larger reverse head-and-shoulders formation was also forming.
4. This larger formation is shown by the three green cups at the bottom of the CHART below price.
5. We can see how the larger formation won out over the smaller formation.
6. Price has since rallied up to the approximate .618 price retracement level.
7. The decline of the last year or so to the low in the CHART suggests the possibility of a 5 wave impulsive movement with the waves being set at the dates marked in the CHART.
8. Such a decline sees 91 calendar days up (FIBONACCI #=89) and 229 down (FIBONACCI #=233).
9. 320 total (LUCAS #=322).
10. In trading days, 227 total (FIBONACCI #=233).
11. W1=25=W2.
12. W3/W5=82/52~PHI (1.618).
13. W1+W2=50~52=W5.
14. W3/(W1+W2)~W3/W5~PHI.
15. W4~W3/2.
16. But interesting as these time relationships are, the price relationships are especially of interest as they suggest the likelihood that the decline shown is a completed Elliott Wave 5 wave impulsive sequence.
17. Here we see the two numbers in the red boxes of approximate equal length (FIBONACCI #=987).
18. W3=1616 (1000 X PHI=1618).
19. The black arrows show that the ratio of W3/W5=1.697 (PHI=1.618).
20. The total decline measures 2033 points (1000 X PHI X SQ PHI=2058).
21. Total/W3=1.258.
22. The total decline/W5=2.136 (SQ RT PHI X PHI=2.058).
23. The short red sloping trendlines show that, over the last couple of weeks or so, such momentum oscillators as RSI and Slow Stochastics are not confirming the new price highs, thereby forming an important price/momentum oscillator divergence (see pages 171-84 of "The $upertrader's Reference Manual").
24. CHART #329 shows weekly prices.
25. Here we see a 3rd head and shoulder formation that's larger still than the previous two.
26. The formation spreads over a little bit more than the last two years.
27. From the low in the lower left corner, the black numbers at the bottom and in the center of the CHART tell us that the market experienced a 24 week rise to the left shoulder, 45 more to the head, 46 mor to the right neckline, and then 25 more to completed the right shoulder.
28. At the top of the CHART above price, we can see that the 116 week segment is comprised of a 45 & 71 week movement (1/2 FIBONACCI #144=72).
29. 116 / 71 = 1.634 (PHI=1.618).
30. 116 / 45 = 2.578 (SQ PHI=2.618).
31. 71 / 45 = 1.578 (PHI=1.618).
32. The center section contains 45+46=91 weeks (FIBONACCI #=89) with 24 & 25 outside.
33. At the very bottom of the CHART, the blue arrow tells us that the total number of weeks in the movement shown is 140 (FIBONACCI #=144).
34. We can see that the right shoulder and right neckline are both below the left shoulder and left neckline.
35. These lower prices suggest that the market is actually in weak position in spite of what seems like a sharp spike rally over the last few weeks.
36. CHART #330 shows daily prices for the continuous spot futures price and inspects the advance from the low of late last year shown in the lower left corner.
37. As the movement from the low appears to be a corrective, counter-trend up-down-up sequence, the turns of this sequence are assumed to have formed an A-B-C Elliott Wave pattern (see pages 283-92 of "The $upertrader's Reference Manual").
38. This A-B-C sequence is shown in the CHART by the blue letters.
39. Note that, in this interpretation, the blue Wave B low has been shifted to the right from the late February actual low to the April low.
40. This shift results in the blue Wave B correction as having lapsed 55 trading days (FIBONACCI #=55) as shown in the CHART.
41. More importantly, it allows the blue Wave C advance to be interpreted as the impulsive sequence shown.
42. Here the waves of the advance are marked by the black numbers.
43. What this shift does is to result in the blue Wave C advance measuring 724 ticks or about the same price advance as in the blue Wave A advance.
44. When the blue Wave B low is place at the February low, the movement is seen as having unfolded in 51-23-50=124 trading days with WA=51~50=WC.
45. In calendar days, 71-33-70=174 with 141 up and 33 down (FIBONACCI #s=144 & 34 and ½ FIBONACCI #144=72).
46. 141 / 33 = 4.273 (CUBE PHI = 4.236).
47. 174 / 33 = 5.273 (2 X SQ PHI = 5.236).
48. 174 / 141 = 1.278 (SQ RT PHI = 1.272).
49. What this all suggests is that a 5 wave impulsive decline occurred over the last year or so to the November low and that price action since to Monday's high has all been corrective.
50. The market is suggesting that the correction is either over or is close to being over and that the market is about to resume its main trend down.
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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he becomes a demon."
--House of Representatives Report on Sunday Mails, 1830
