The best way to a man's heart is to saw his breast plate open.

--Women's restroom Murphy's, Champaign, IL

UPDATED 20060519

COMMENT #174

CHART #s 357 & 358

1. A few days ago, we were expecting this market to either complete and important low soon or to have already completed the low as price moved down into the turn projected by the blue MIC (Monthly Inversion Cycle) box shown in the lower right corner.

2. The July and December contracts, which were showing a little bit different picture, were presented here.

3. CHART #357 shows daily prices for the continuous spot futures contract on the left and December contract on the right.

4. We can see how the lows of a few days ago in these contracts have held.

5. CHART #358 shows daily prices for the July futures contract.

6. Here we see the low shown in the lower right corner not being confirmed by such momentum oscillators as RSI and Slow Stochastics (see pages 171-84 of "The $upertrader's Reference Manual").

7. But what is important here is that the decline from the February high now appears as a completed Elliott Wave move.

8. There is an alternative that sees the 323 low as only being the 1st wave of the decline which would make yesterday's low Wave 3, but this interpretation is not favored primarily because of the blue MIC box.

9. As we're often discussed, we usually want to fit the Elliott Wave possibilities to the more important cycle information (see pages 283-92 of "The $upertrader's Reference Manual").

10. The interesting aspect of this decline are the black waves in the blue Wave 5 decline.

11. This decline lasted 606 ticks (FIBONACCI #=610).

12. As can be seen by the red boxes, the 1st and 5th black wave declines are about equal in price.

13. In time, if the decline ended yesterday, the 1st = 2 trading days and the 5th = 4 (4/2=2.000).

14. The decline is seen, in the lower right corner, as having lapsed 71 trading and 91 calendar days (1/2 FIBONACCI #144=72 and FIBONACCI #=89).

15. The entire movement shown in the CHART from last summer's high to the August low to the February high and to yesterday's low has lasted 110 up and 109 down days, 219 total.

16. Today is the 72nd of the decline from the February high (1/2 FIBONACCI #144=72) and 110th of the two downlegs from the July high of last year and from the February high.

17. These relationships are shown in the black box on the page.

18. In calendar days, 164 up and 162 down (100 X PHI=161.8).

19. To the right of the box, we see that the total number of trading days in the 5 swings shown equal 76 up and 143 down (LUCAS #=76 and FIBONACCI #=144) making today the 144th of the number of down days in the down-up-down-up-down swings shown.

20. The failure of the December and continuous spot futures contract to confirm yesterday's low in the July have formed important intramarket divergences (see pages 171-84 of "The $upertrader's Reference Manual").

21. These divergence ratify the price/momentum oscillator divergences seen in the July contract yesterday and seen a few days ago in the December contract at its low.

22. We can see in the CHARTS how the commercials continue to support this market (see the red line in the COT [Commitment of Trader's] box at the bottom of the #336 CHART.

UPDATED 20060519

COMMENT #175

CHART #s 359 & 360

1. In similar manner as in the previous COMMENT, CHART #359 of daily prices shows the continuous spot futures contract on the left and the December futures contract on the right.

2. Both show day session prices.

3. The intramarket price divergence discussed a couple of weeks or so ago can clearly be seen in the CHART.

4. On the right, we can see how a head-and-shoulders chart formation has formed at the top.

5. This formation is pretty classic in that the shoulders formed 7 trading days from the head on each side.

6. CHART #360 shows hourly prices for the December contract with the head-and-shoulders top formation marked by the green caps.

7. The thick red down trendlines mark a down channel.

8. Price is at the Point of Decision in this market.

9. This is the point at which the market either bottoms and ends an A-B-C corrective formation or when acceleration is seen past the lower down channel trendline.

10. The red line at the bottom of the CHART suggests that price will eventually move lower.

11. The short red sloping trendlines in the momentum oscillator box at the bottom of the page suggest that the market is in position to correct upwards for a few days.

12. The 5 swings in the CHART from the left shoulder top have total 60 down and 30 up hours, 90 total.

13. 60/30=2.000.

14. 90/30=3.000

UPDATED 20060519

COMMENT #176

CHART #361-362

1. Earlier this year, this market was in position to set an important low at the blue boxes shown in the lower right corner of the CHART of daily prices for the continuous spot futures contract.

2. The market had thus turned at the blue MIC (Monthly Inversion Cycle Index) high last September and at the February low shown.

3. The following two CHARTS were also presented of daily prices identifying the February low shown of 214.

4. We can see how the February low turned out to be the left shoulder shown in today's CHART #362 of daily prices for the continuous spot futures contract.

5. Here we see the reverse head and shoulders pattern formed with lows in February, March and April on the dates shown at the green cups.

6. These dates were part of the 16 trading day periodicity shown by the red lines below price.

7. At the bottom of the CHART, the red line shows how the net commercial position has moved decidedly to the negative side.

8. From the 403 low, the market is believed to have set the Wave 4 low of the sharp advance that eventually followed on 426 at the next 16 trading day rep.

9. We can see how the high in the CHART in the upper right corner has formed the short red sloping trendline shown, thereby forming an interesting price / momentum oscillator divergence (see pages 171-84 of "The $upertrader's Reference Manual").

10. CHART #361 also shows daily prices for the continuous spot futures contract.

11. The high in the upper left corner is especially interesting as it occurred about 3 weeks prior to the important turn seen in the rest of the complex as shown here:

12. That blue Wave 3 low in the above CHART in early December aligned with the December high shown in the upper left corner of today's #361 CHART.

13. From the high about a year and a half ago, this market is believed to have declined in the 3 legged movement shown by the blue A-B-C to the low of last summer.

14. The red Wave 5 portion of the blue Wave C decline is especially interesting because of the event shown in the next CHART of daily prices.

15. From this low, another blue A-B-C movement to this week's high is believed to have followed as shown in today's #361 CHART.

16. A key movement in this advance is the green triangle marking the blue Wave B corrective decline.

17. Here we see a very complex affair marked by the blue a-b-c-d-e.

18. The green cups show an even larger reverse head-and-shoulders movement marked in the cup by the three green cups.

19. Here we see the left and right shoulders bottoming 94 trading days each from the head (2 X LUCAS #47=94).

20. Note that these shoulders marked in the CHART are not the actual lows that marked the end of the decline last July or the blue Wave e of B low in April.

21. The actual lows occurred inside (closer to the head) by 8 and 5 trading days (FIBONACCI #s=8 & 5).

22. The right shoulder low at the blue Wave e of B low was thus 89 trading days from the head (FIBONACCI #=89) and 142 from the blue Wave A high (FIBONACCI #=144).

23. From the blue Wave e of B low, the 5 wave advance marked in the CHART by the 5 red numbers is believed to have unfolded as marked in the CHART.

24. This advance carried price up to the red dotted price retracement line shown in the CHART at the .786 price retracement level (1/SQ RT PHI=.786).

25. The high of the move also intersects the center ascending blue pitchfork line shown.

26. The blue numbers just above the red dotted line in the upper right corner shown that the advance from the low of last July lasted 41-142-31 or 214 trading days (3/2 X FIBONACCI #144=216) while the decline to the July low lasted 146 trading days (FIBONACCI #=144).

27. The total decline / advance, as shown in the blue box, thus lasted 146 + 214 = 360 trading days (360 / 72 = FIBONACCI #5).

28. In the bottom box, we can see how commercials have moved to the most negative position in about a year or so.

29. The black dash horizontal line shows how commercials were similarly very negative last year when price was around the present levels.

30. When we inspect a chart of daily futures prices, 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".