"The foolish and the dead alone never change their opinions."

--James Russell Lowell

UPDATED 20060609

COMMENT #199

CHART #s 398-400

(Post-Close)

1. The story at the high in this market was how the contracts in the left column were making highs that were not confirmed by those in the right column, thereby forming an important intramarket divergence (see pages 171-84 of "The $upertrader's Reference Manual").

2. This type price action was consistent with the weekly CHART presented here …

3. … and the daily CHART of the continuous spot futures price shown here.

4. We can see the small price/momentum oscillator that was occurring at the high as marked by the two small red sloping trendlines in the upper right corner of the CHART and in the middle box to the right (see pages 171-84 of "The $upertrader's Reference Manual").

5. While a small reverse head-and-shoulders bottom was shown in the CHART above, a larger reverse head-and-shoulders bottom was shown in the CHART below.

6. We can see how the net commercial position had moved to a very negative position at the high.

7. While the story of how the various contracts were seen to be diverging as the top was being formed in the first market …

8. … a more important divergence was occurring at the same time in that none of the contracts in the second market, as show in today's CHART #398 of daily prices, were confirming the new highs that were occurring in the left column of the first market.

9. This divergence set the stage for the decline that followed as can be seen to the right of the contracts shown in the following CHART #399.

10. The upper right corner of the CHART shows the September contract.

11. Here we see one interpretation of how the market has unfolded that labels the decline from the high shown in the CHART as a 9-5-4=18 trading day affair.

12. If the three "x" shown in the CHART have formed an Elliott Wave a-b-c formation, then a-9=b+c with 5 up and 13 down trading days (FIBONACCI #s=5 & 13).

13. Of course, the contracts in the left column, by themselves, suggest a Wave 1 decline that is sharp and not really suggestive of an a-b-c corrective movement.

14. CHART #400 shows daily prices for the continuous spot futures contract.

15. Here we see the same three "x"s shown with a little different movement of 7-4-5=16 trading days with 4 up and 12 down.

16. 12/4=3.000.

17. 16/4=4.000.

18. We can see that this market is at the next rep of the 16 trading day periodicity marked in the CHART by the red vertical lines.

19. Price can be seen as having already retraced .382 of the advance from the March low (SQ [1/PHI=.382]).

20. When we analyze the two downlegs marked by the two black "x"s, the red numbers show that they measure 497 & 495 ticks (equality) to Friday's low.

21. These markets are at key Points of Decision.

22. The blue and green boxes in the lower right corner suggest more weakness.

23. The green down sloping trendline shown in the middle box suggests that the decline is not finished yet.

24. The negative net commercial position shown by the red line in the bottom box supports the expectation of lower prices.

25. The price pattern, however, is suggesting that the initial thrust down has likely about ended for a few days.

26. A break of Friday's low, however, negates this expectation of a temporary pause.

27. We recently saw this similar Point of Decision reached in this market here:

UPDATED 20060609

COMMENT #200

CHART #s 401 & 402

(Post-Close)

1. The following CHART #401 updates monthly prices from the one of early last month.

2. The changes are minor and primarily relate to price having traded, last month, a couple of ticks or so above the red horizontal line shown in the CHART.

3. The relationships have been recalculated and a few added.

4. The color shading can be used to locate related measurements.

5. An alternative Elliott Wave interpretation is shown at the bottom of the CHART.

6. The following CHART #402 updates monthly logarithmic prices of the same market, but for the cash index.

7. Note that the low in this CHART occurred in 1993 and not 1991 as in the CHART #401 of monthly prices for the continuous spot futures index.

8. Several interesting relationships are shown by the arrows in the CHART and in the text below price.

9. The 3.212 in the upper left corner compares the amount of price gain versus the price low shown in the CHART (2 X PHI=3.236).

10. Especially interesting is the relationship of last month's high to the 1998 high of 2.042 (see the green arrows) and the same 1998 high versus the 1993 low at 2.062 (PHI X SQ RT PHI=2.058).

11. Related is the ratio of the gain from the 2001 low to the 2001 low of 2.681 (SQ PHI=2.618) which is shown to the right of price.

12. As can be seen by the dotted green arrow, the high price shown in the CHART versus the low price is 4.212 (CUBE PHI=4.236).

13. The black arrows show that the time relationships of the three swings shown from the 1993 low to the 1998 high to the 2001 low to the 2006 high of 5-3-5=13 years (FIBONACCI #s=3, 5 & 13) suggest an A-B-C advance.

14. We know from the red lines at the top of the #401 CHART that the decline that preceded this 159 month advance also lasted about the same amount of time at 157 months.

15. What is suggested by these two equal segments in the cash index is a decline of 29-58-70=157 months to the 1991 low and an advance of 60-45-54=159 months to last month's high.

16. This latter 3 legged advance is the one shown in the monthly CHART of log prices #402.

17. Since there are two A-B-C movements of equal length in time, the suggestion is that the first A-B-C movement completed a Wave [A] low at the 1993 low in the cash market and that the second A-B-C movement completed a Wave [B] high at the 2006 high last month (see pages 283-92 of "The $upertrader's Reference Manual").

18. Rather than repeating the details, COMMENT #148 of 20060502 can be accessed keeping in mind the minor revisions shown in the two updated CHARTS.