"When black is fraudulently declared to be white,
not all will live in darkness."

UPDATED 20060613

COMMENT #203

CHART #s 407-409

1. A couple of years or so ago, when the CHART service was in its infancy, the following relationships were noted at thee August bottom.

2. A couple of days later, the red Wave 1 - 2 labeling was added.

3. It was from this low that the rally noted in today's CHART #409 of weekly prices ensued to the high shown in the CHART.

4. From that high, it is likely that the 5 wave impulsive sequence marked by the blue numbers has unfolded (see pages 283-92 of "The $upertrader's Reference Manual").

5. From the September low of last year, the market appears to have advanced to the blue Wave A high and declined to the blue Wave B low, both in 3 legged movements.

6. A few days before the September low, the following CHART was issued in anticipation of the low.

7. Today's CHART #408 shows daily prices for the December contract.

8. The September low of last year is shown in the lower left corner.

9. We can see that price right now is right at, and is breaking, the December retest low of late last year.

10. Today's CHART #407 shows daily prices for the continuous spot futures price.

11. Here we see that price is holding above the same price level (the December low of late last year.

12. The movement from the high of early this year shows that the market peaked at the red MLC (Monthly Linear Time Cycle Index projected high).

13. From that high, the 3 legged A-B-C decline is marked in the CHART by the blue letters.

14. We can see, at the top of the CHART, that the rally to the high shown in the middle of the CHART lasted 90 trading days followed by a decline to last week's low of 89 trading days (FIBONACCI #=89).

15. Price has been moving down into the green and blue boxes in the lower right corner as the short red lines in the upper and middle boxes show the occurrence of a price/momentum oscillator divergence (see pages 171-84 of "The $upertrader's Reference Manual").

16. The bottom box shows that the net commercial position is back above the levels that bottomed the market last September and December.

17. When we examine price action in both the continuous spot futures and December contracts, we can see that the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual" is in position to provide long side entry with very minimal risk.

UPDATED 20060613

COMMENT #204

CHART #s 410-411

1. From the red and blue boxes at the price high in the following CHART, the market declined to the green box and then rallied to the red and blue boxes.

2. The end of February found the market challenging the long term green up trendline drawn from the low in the lower left corner of the CHART.

3. The low of the move was marked here:

4. The subsequent rally, however, was short in both time and price.

5. The next low was set here at the blue WIC (Weekly Inversion Cycle Index) projected turn:

6. By the end of the month, price was a little higher and the low had held.

7. The commercials had assumed a very bullish net long position as shown here:

8. Today's CHART #411 shows daily prices for the continuous spot futures price.

9. We can see that the red down trendline in effect for the last year or so has just been broken.

10. No doubt the break was one reason for the enthusiasm shown in the CHART.

11. Note how price returned to the trendline last Friday and traded up and away from the trendline yesterday.

12. CHART #410 shows daily prices for the December contract.

13. The horizontal line shows how price here has continued to trade above the April low.

14. But this is not the case in the spot July contract (not shown) which broke the April contract by a couple of ticks prior to the rally shown.

15. It is possible that the December contract is in negative position as shown by the blue A-B-C labeling suggesting a corrective movement from the April low.

16. This rally has lasted 56 calendar days from the April low (FIBONACCI #=55).

17. Such interpretation is not favored.

18. Instead, the market is believed to have set important lows as reviewed this spring an to be in an important upleg.

UPDATED 20060613

COMMENT #205

CHART #412

1. The CHART shows hourly June prices and updates recent discussion.

2. The two blue and black Wave 1-2 sequences show the assumed bearish position of the market (meaning that the market is in the blue Wave 3 decline).

3. A 12 hour rally is allowed under this interpretation.

4. Should it occur, the market would have unfolded in a 6-12-12=30 hour total movement after the same 30 hour decline to the black Wave 1 low.

5. The red dotted line shows the 50 percent price retracement level (see pages 185-7 of "The $upertrader's Reference Manual").

UPDATED 20060613

COMMENT #206

LTC0601 - #s 3-5

CHART #s 413-5

1. The April-September edition of "The 2006 $upertrader's Book of Linear Time Cycles" expanded upon the use of various stock market indexes specific to various commodity groups.

2. Let's look at a few examples to see how the information can be, and has been, used to signal important future market direction.

3. From the early-year high in the crude oil market, a sharp decline ensued, whereupon, saber-rattling bottomed the market and took prices up to new highs in April.

4. As can be seen in the following CHART, the early year high was in alignment with the red box at the blue "3" above prices.

5. The red box represented the MLC (Monthly Linear Time Cycle Index) projected high shown in the CHART.

6. The decline took price down into the blue and green boxes shown below price.

7. The green box represents the MLC projected low and the blue boxes the MIC and WIC (Monthly and Weekly Inversion Cycle Index) projected turns.

8. Since price had been moving down into these projected turns, the turns projected produced lows in price.

9. By the end of April, we can see how price had moved to a new high for the year into the red WLC and MLC (Monthly and Weekly Linear Time Cycle Index) projected highs.

10. This CHART for the XO is for the American Stock Exchange index of oil stocks.

11. The next CHART shows how the continuous spot futures price for crude oil had moved up into the blue MIC projected turn from the green MLC projected low.

12. Hence, the XOI stock market index and price of crude oil itself were both at important topping points.

13. A few days later, the December crude oil price made a new high as shown in the following CHART.

14. The new high was in alignment with the WIC projected turn marked in the CHART by the small blue box and just a bit after the blue MIC projected turn.

15. As this new high in the December contract was being made, the XOI stock market index was not confirming the new high, thereby forming an important price/index divergence (see pages 171-84 of "The $upertrader's Reference Manual") as can be seen in the following CHART:

16. The continuous spot futures contract was also unable to confirm the new high in the December contract, thereby enhancing the importance of the price/index divergence.

17. A couple of weeks later, we can see how the price action of the two markets was unfolding with the continuous spot futures contract and the 421 high on the left and the December contract and the 502 high 7 trading days later on the right.

18. A couple of more weeks and the movement had seemingly unfolded as presented here in the hourly CHART of December prices:

19. Another example can be seen in the gold market.

20. A couple of years ago, the following CHART was posted as the AMEX gold and stock index was believed to be peaking in November:

21. The analog year relied on as "best fit" was the 1987 experience where price had experienced a similar rise into the latter months of the year as seen here:

22. What happened afterwards was shown here in the analog year and was used as a model to signal the expectation of lower prices.

23. A few days later, silver peaked here:

24. Gold followed here:

25. Note that the new high in gold was not being confirmed by silver or by the stock market index.

26. A few months later, the end of the initial gold decline was seen to have bottomed here:

27. The next important event involving the gold and stock market index occurred here at the May, 2005 low.

28. The importance of the May 2004 and 2005 lows is seen in the following CHART of weekly prices for the stock market index.

29. The blue numbers suggest that the advance from the May, 2005 low is a completed 5 wave impulsive advance (see pages 283-92 of "The $upertrader's Reference Manual").

30. When we look at the Tangibles sheet, we don't see the concentration of events in the complex we would hope to see at such an important top.

31. However, when we look at a CHART of daily prices for the AMEX gold and silver stock market index, we can see that price had moved up into the blue boxes in January, down to the blue box in March, and then up into the blue box and red MLC projected high in May as shown in the following CHART:

32. Further, in the gold bugs stock market index, we can see similar action where price moved up from the blue box in March to the red boxes in May at the high.

33. We can see the pending high in the gold market itself in the following CHART posted just a few hours before the final high.

34. One can see the red WLC (Weekly Linear Time Cycle Index) box on the cycles sheet (see page 67) for the gold market (see MKT NMBR 64) and high projected for the week ending Friday, 512 in the WLC column.

35. How execution of the short sale in the gold market occurred is shown in the following two CHARTS of 15 minute bar prices:

36. The first shows prices as of the close on the 17th.

37. The second shows the exuberant opening the next morning and sell-off that began, in earnest, the current decline.

38. This information was then further extended on the 22nd to the gold / platinum spread which was one of the "Trades of the Year" in "The 2006 $upertrader's Almanac - 1st Half Edition".

39. The CHART that was posted to available email address of Almanac purchasers was distributed the day of the end of the decline shown.

40. As can be seen in the CHART of current prices, the spread has increased over $10,000 in the days since, gold's dropped over $10,000.

41. Not to mention what's happened in silver …

42. … or copper.

43. Seems to be not too shabby for a $110 book!