"It could probably be shown by facts and figures
that the only distinctly native American criminal class is Congress."

--Mark Twain

UPDATED 20060628

COMMENT #219

CHART #438

1. Last month, we took a look at the following CHART of weekly prices as the high was being set.

2. The three red caps suggest a pretty significant decline.

3. Earlier this month, the high was retested with some contracts actually making minor new highs as seen in the following CHART:

4. The energy of the retest was expected to end here, and did:

5. Today's CHART #438 updates daily prices.

6. If the weekly CHART is correct, the expectation is that the market is in very bearish position as shown by the blue-black 1-2 sequences.

7. The first blue one has seen a 6 trading day decline and 6 trading day rally.

8. The second has seen a very simple down/up movement of 2 trading days each.

9. The red lines show several 55 trading day segments (FIBONACCI #=55) with the one identified by the second segment at the bottom of the CHART ending today.

10. If this interpretation is correct, the break of the blue Wave 1 low is significant as it should put the market in position to accelerate to the downside (see pages 283-92 of "The $upertrader's Reference Manual").

11. The movement would be expected to be something along the lines of the movement from the blue Wave B low shown in the CHART to the blue Wave C high, just down instead of up.

12. The point, of course, is that should the movement unfold, reward is very large versus risk.

13. It is thus significant that price did not trade above the black Wave 2 high today (prices are as of yesterday's close).

UPDATED 20060628

COMMENT #220

CHART #s 439-441

(Post-close COMMENT)

1. The continuous spot futures contract made its high for the year, to date, on time when it moved up into the blue MIC (Monthly Inversion Cycle Index projected turn) in the upper right corner of the CHART:

2. A few days later, some of the deferred contracts followed by doing the same with respect to the blue WIC (Weekly Inversion Cycle Index projected turn) shown in the upper right corner of the following CHART:

3. The disparity between the large spec and commercial net position was highlighted in the following CHART:

4. What has happened since is shown in today's CHART #439 of daily prices for the continuous spot futures price:

5. The red circle at the bottom of the CHART is the same one as in the previous CHART as is the thick green up trendline.

6. The green thick up trendline marked 4 important rates of ascent shown in the prior CHART.

7. In today's CHART, we can see how price broke that line earlier this month and is now trading below the line, suggesting that the market remains in weak position.

8. The question, however, is shown at the bottom of the CHART.

9. As price has gone sideways, commercials have been covering their net short positions established at the highs in early May.

10. This sideways action suggests that this market is in a 4th wave sideways correction (see pages 283-92 of "The $upertrader's Reference Manual").

11. CHART #441 also shows daily prices for the continuous spot futures price.

12. The rise from the February low is shown in this interpretation as having only completed three waves at the April high and to have since been in a complex sideways corrective 4th wave.

13. Although this interpretation would explain the sideways movement since the high, it is not the favored interpretation.

14. It would "fit" with the red and blue MLC / MIC boxes at the April high, however, and with the green boxes at the bottom in June.

15. Further, with the red WLC (Weekly Linear Time Cycle Index projected high) shown in the upper right corner, it would seem that the market is still about to set another trading-range high.

16. The black Wave A low and Wave B high shown in the CHART are consistent with this projection.

17. We can see that the movement to the April high required 230 trading days as was marked at the time (FIBONACCI #=233).

18. From the February low, another interesting periodicity has developed that is marked in the CHART by the red vertical lines below price and which measures 22 trading days (FIBONACCI #=21).

19. The total segment to tomorrow (Thursday's - 629) trading thus measures 89 trading days (FIBONACCI #=89).

20. Earlier this month, the market appeared to be setting the blue Wave 2 of III high as shown here:

21. The low thereafter occurred at the next rep of the 57 or so periodicity identified by the red lines at the top of the CHART.

22. Price has, again, traded up to the blue descending dashed trendline drawn off the highs and has retraced about .786 of the decline from the blue Wave 2 high at the beginning of the month.

23. The new high at the black Wave 2 high is occurring at a time that price is diverging with such momentum oscillators as RSI and Slow Stochastics, thereby forming an important price / momentum oscillator divergence (see pages 171-84 of "The $upertrader's Reference Manual").

24. From the black Wave 1 low, the interpretation shown results in 10-35-24=69 hour movement (2 X FIBONACCI #34=68) with 34 up and 35 down.

25. 12+69=81 hours to the black Wave 2 high and 3+81=84 to the 144 hour measurement from the left shoulder high and point where the blue Wave 2 divergence began.

26. The 1st hour tomorrow (Thursday) is thus the 89th from the beginning point of this price / momentum oscillator divergence (FIBONACCI #=89) and 144+89=233rd from the left shoulder high.

27. As price is, again, in that grey horizontal resistance box, this is an ideal place to set the black Wave 2 high.

28. We can see that the price action on this hourly CHART is set up for short side entry using the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual".

29. This would be the 2nd .786 price retracement level if the black Wave 2 high does occur as presented, however.

30. The first is the blue Wave 2 high versus the blue Wave II high which is marked by the first red horizontal dotted line.

31. The second is the black Wave 2 high versus the blue Wave 2 high which is marked by the second red horizontal dotted line.

32. The point of all this is that it appears that we are at another important juncture where risk to short positions is minuscule and potential reward very large.