A truly happy person is one who can enjoy the scenery on a detour.

UPDATED 20060517

COMMENT #166

CHART #344

1. A bit ago, the following CHART of hourly prices for the June day session futures contract was posted.

2. The CHART showed the decline from the blue Wave 4 high in the upper left corner.

3. The first 89 hours (FIBONACCI #=89) was seen to have, under this interpretation, experienced the four blue Waves shown in the CHART (see pages 283-92 of "The $upertrader's Reference Manual").

4. We can see that price was at the next low of the 39 hour periodicity shown by the green lines at the top of the CHART and was due to set a low.

5. The expectation was that a descending diagonal triangle was being completed.

6. The descending diagonal triangle was marked by the two green descending trendlines shown in the CHART and by the black numbers 1 through 5.

7. The expectation was that the blue Wave 5 was ending.

8. In the very bottom of the CHART in the right corner, the possibility was allowed that only the black 3rd Wave of 5 was being completed.

9. A sharp rally from the low did ensue.

10. However, rather than unfolding in a clear impulsive movement and, thereby, suggesting trend change, the movement was called into question by the following CHART of 15 minute bars.

11. Today's CHART #344 of hourly prices for the overnight June futures contract updates.

12. Here we see the black Wave 3 low marked in the CHART that was in the prior CHART of hourly prices for the day session contract.

13. The black Wave a of 4 high just to the right of that low is the movement shown in the prior CHART of 15 minute bars.

14. Then the black Wave b low and movement up to the black c of Wave 4 high at the upper down green channel trendline to complete the black Wave 4 high shown.

15. From this high, the market has declined for 137 hours (FIBONACCI #=144).

16. The yellow highlighting shows that the black 1 & 3 Waves lasted 230 & 236 hours (FIBONACCI #=233).

17. 2 X 233=466 which is the total of the 1st and 3rd Waves down.

18. Although the decline to the low shown lasted 137 hours or was 7 hours short of an ideal 144, the black Wave 4 movement lasted 148 or 4 hours more than the ideal 144 (LUCAS #s=4 & 7).

19. The total was thus 3 short of a perfect 288 (2 X FIBONACCI #144=288).

20. But when the black 3rd Wave decline is included with the 4th and 5th, the total becomes 236+148+137=521 which is the total of 144+144+233.

21. The black Wave 2 of 184 is 6 more than an ideal 2 X FIBONACCI #89=178 while the blue Wave 1 is 3 less than FIBONACCI #233.

22. If we take the black Wave 1, 5 and the blue Wave 5 declines of 80, 53 & 131 ticks and divide these numbers by 10, what is left are the FIBONACCI #s of 8, 5 & 13 thereby showing that, from a price perspective, the legs shown are also in FIBONACCI / PHI relationships.

23. There remains the possibility that the movement is only the Wave a low of black Wave 5 decline and that a Wave b of 5 high and Wave c of 5 low are yet to follow.

24. The relationships shown, from both a time and price perspective, when combined with yesterday's discussion, suggest, however, that the low has been set.

25. We have been discussing of late how the drawn out extension of the expected bottom has been seen in other markets.

26. If this bottom occurs as it is expected to, the bottom is expected to affect other markets that have been experiencing trends of late.

UPDATED 20060517

COMMENT #167

CHART #s 345-347

1. CHART #345 updates monthly prices.

2. It's been about 5 months or so since this CHART was reviewed.

3. In today's update, we can see, by the 5 red boxes shown in the lower right corner, that the recent rise from the 2004 low appears to have unfolded in a 5 wave impulsive advance (see pages 283-92 of "The $upertrader's Reference Manual").

4. From the 11 month high, the market has since declined 6 months to this month's low.

5. As shown in the CHART, next month will be the 7th month of the decline.

6. Hence, 11 up and 7 down = 18 months in June (LUCAS #s=7, 11 & 18).

7. Since we have successive LUCAS #s involved, we know that the up-down movement shown is in PHI proportions.

8. From the 11 month high, the decline since appears as an a-b-c correction which is consistent with the red boxes shown in the advance.

9. Recently, we reviewed how the following CHART of weekly prices seemed to be in position to set the head-and-shoulders top formation suggested by the three red caps.

10. The market advanced another 4 trading days to the high shown which was the 55th of the advance from the February low (FIBONACCI #=55) as seen in today's update #350 of daily prices.

11. The movement is believed to have completed the blue A-B-C advance shown (see pages 283-92 of "The $upertrader's Reference Manual").

12. We can see how this market is set up today for short side entry via the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual".

13. This market was similarly set up when presented a week or so ago, but the entry sell signal was not elected.

14. The entry sell stop trigger is thus a little higher now than it was then.

15. In similar manner, we can see that the following market appears in position to set the reverse head-and-shoulders chart formation shown in CHART #346 of weekly prices.

16. We can see that the two downlegs on the left and right sides of the CHART have each lasted 25 weeks or about a half year.

17. In between are two segments of 45 and 46 weeks, 91 total (FIBONACCI #=89).

18. From the left shoulder to the head is 45 weeks versus 71 on the right (1/2 FIBONACCI #89=44.5 and ½ FIBONACCI #144=72).

19. We thus know that the two movements are in approximate PHI proportions.

20. The total movement has lapsed 58 up and 58 down weeks, 116 total, as shown in the CHART (2 X LUCAS #29 = 58).

21. From the high late last year, the market has declined in a 10-6-10 week movement to this week.

22. The two downlegs, as can be seen by the green arrows, are, in terms of price, in a relation of 1.604 : 1.000 (PHI=1.618).

23. CHART #347 updates daily prices for the cash index.

24. The essence of the movement is the advance to the high of last summer and decline to last week's low shown in the lower right corner.

25. These two movements are labeled by the blue [A] high and blue [B] low.

26. There are numerous unique relationships shown in the CHART.

27. Perhaps the one of most interest, however, is seen in the final decline of 234 ticks in the 5th wave of the decline from the blue Wave e of B high and total extent of the decline of 612 ticks (FIBONACCI #s=233 & 610).

28. This places the two downlegs in a relationship of 2.615 : 1.000 (SQ PHI=2.618).

29. The blue Wave [B] decline is seen as having unfolded in the blue A-B-C movement shown.

30. This movement results in several interesting PHI relationships shown by the blue text below price and labeled "Wave [B]".

31. The same is seen in the relationship of the blue Wave [A] advance and the blue Wave [B] decline.

32. These relationships are shown above price to the left.

33. At the bottom of the CHART, we can see how bullish is the commercial net position.

34. The green circles show four previous periods when the net position was at current levels.

35. As can be seen, in each period, a stout rally ensued.

36. Close inspection of this market shows that it is also set up for long side entry today via the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual".

UPDATED 20060517

COMMENT #168

CHART #348

1. CHART #348 shows daily prices for the cash index and updates past discussion.

2. The essence of the CHART is the blue A-B-C advance from the low of late last year.

3. This advance has unfolded, as labeled, over 41-60-60=161 calendar days (100 X PHI=161.8).

4. The decline from the 504 high lasted 146 trading days (FIBONACCI #=144).

5. In the blue Wave C advance, black waves 5 & 1 are about equal in price.

6. At the bottom of the CHART, we can see that the red and black lines have crossed.

7. As we can see, the last time they were in this relationship was at the high shown in the upper left corner of the CHART.

8. Price has moved up into the red WLC (Weekly Linear Time Cycle Index) projected high as can be seen.

9. We thus afford the projected high great deference.

10. When we inspect a chart of daily prices more closely, we can see that this market is set up for short side entry today via the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual".

UPDATED 20060517

COMMENT #169

CHART #349

1. CHART #349 shows 15 minute bars.

2. From the high shown, the market has declined in a 5 wave impulsive movement marked in the CHART by the 5 black numbers.

3. This impulsive decline suggests that the trend has, for the moment, turned down in this market (see pages 283-92 of "The $upertrader's Reference Manual").

4. Price is now attempting to fill the grey gap shown.

5. This market is set up today for short side entry via the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual".

6. The market should be monitored closely as it approaches the gap and retracement levels shown.

7. If the market is able to make it back to or around the gap, the market should be followed for short side entry in the expectation that the retest of the recent highs will fail around the gap and resume what is now believed to be a downtrend.