"Now what I contend is that my body is my own,
at least I have always so regarded it.
If I do harm through my experimenting with it,
it is I who suffers, not the state."

--Mark Twain

UPDATED 20060630

COMMENT #221

CHART #

1. This CHART showed the monthly/weekly Inversion Cycle alignment in the lower right corner at the blue WIC and MIC boxes (Weekly and Monthly Inversion Cycle Index projected turns).

2. The expectation at the time was that price was in weak position and that the alignment was susceptible to downside acceleration.

3. Acceleration in such instances of alignment is rare, but does occur about 15 percent of the time.

4. Four trading days later, price was a little lower, but was not increasing its rate of acceleration, whereupon the following CHART was issued in the expectation that the downside movement was at an end as seen by the green and blue boxes in the lower right corner and other events highlighted in the COMMENT and CHART.

5. The next day, the following CHART was issued and we were able to see how price had moved down from the red boxes at the price highs to the green boxes at the low shown.

6. Along the way to the price low, the following CHART of hourly prices for the June contract was issued at the beginning of the month.

7. The observation at the time was that there were a number of 5 wave impulsive downlegs able to be seen, but, overall, they didn't fit into a conclusive picture and, thereby, suggested that more down was to follow.

8. A most important CHART of hourly prices was released a couple of weeks later that seemed to resolve the decline from the May high to the June low in the continuous spot futures contract by interpreting the decline as the 5 wave impulsive sequence marked in the CHART by the 5 blue numbers.

9. The reason this CHART is of such great importance is that the 5 blue numbers is consistent with other discussion in this complex and suggests that the entire decline has established the larger trend as now being down and as forming, at the low, the blue Wave I low seen in the lower right corner.

10. What this means is that the market is now believed to be in a blue Wave II correction (see pages 283-92 of "The $upertrader's Reference Manual").

11. What we want to do now is to take a look at four markets in this complex and see if the ratify the blue Wave I low shown in the above CHART of hourly prices and to try to determine if the market is unfolding in a counter-trend corrective movement as is suggested by the above hourly CHART.

12. CHART #442 updates daily prices for the continuous spot futures contract.

13. Here we see the same 5 wave decline marked in the CHART by the blue numbers as was seen above in the hourly CHART.

14. The June low is believed to be a Larger Degree of Trading Wave I low.

15. From the low, the market is believed to have unfolded, so far, in the 5 trading day advance to the blue Wave A high and 5 trading day decline to the blue Wave B low, 10 trading days total.

16. From the blue Wave B low, the market is believed to be in the process of completing a blue Wave C advance.

17. Were the advance to end today and to make a new high above yesterday's high, the blue Wave C advance would have lasted 2 trading days and the A-B-C movement 5-5-2=12 total.

18. Since the blue Wave I decline lasted 24 trading days, the blue A-B-C movement to the blue Wave II high would have lasted half the decline as 12/24=.500.

19. The blue Wave I decline and Wave II correction from the May high would thus have lasted 24+12=36 trading days.

20. This 36 trading day movement versus the blue Wave II advance of 12 trading days would thus be 3.000.

21. Also likely would be a 5-5-5=15 trading day movement which, should it occur, would end at the second black down arrow shown in the CHART.

22. The upper red ascending channel trendline shows where price would advance to should the advance carry to the extent of the blue Wave A upleg and last 5 trading days.

23. This price level is around the .786 price retracement level shown in the CHART by the upper dotted red horizontal trendline.

24. At the bottom of the CHART, we see the small spec trader net position level.

25. Earlier this month, this level had been seen as a bearish factor in the following CHART of daily prices.

26. It is noteworthy that in today's CHART #442 the net long (supposedly wrong-way) net position of the small spec trader is even more bearish than it was at the beginning of the month.

27. CHART #443 updates hourly prices through this morning's price action.

28. We can see that the 39-13=52 hour sequence of the blue Wave B-Wave C legs is very proportionate in that 39/13=3.000.

29. Further, price is right up at the blue Wave 2 high which, as we saw in the daily CHART #442 above, is right at the .618 price retracement level (see pages 185-7 of "The $upertrader's Reference Manual").

30. Although it is also important that price is also right at the blue center fork of the ascending pitchfork, the movement appears to have only completed 3 legs of an expected 5 and the momentum oscillators such as RSI and Slow Stochastics are not yet diverging with price.

31. We must take note, however, that the advance has now lasted 96 hours versus the 191 in the decline to the blue Wave I low.

32. In other words, right now, were the market to set the blue Wave II high here, II / I would be equal to 1.990 (2.000).

33. In other words, an almost exact 50 percent time retracement at a .618 price retracement.

34. This CHART thus suggests that we should be very sensitive to an early resumption of the bearish downtrend.

UPDATED 20060630

COMMENT #222

CHART #444

1. In the following CHART, we had noted how commercial interests were increasing their short positions as prices fell, a very bearish development.

2. Today's CHART #444 of the continuous spot futures price updates and shows at the bottom of the CHART that contract expiration in June has caused offset of both the net short commercial position and the net long small spec position (green line).

3. This narrowing occurred right at the June price low.

4. It is expected that the pattern seen after the March expiration where the spread between the two widened considerably is already underway in the post-expiration period into September.

5. In the hourly CHART, the following was presented just before the June low:

6. The movement was seen as the blue Wave 1 low / Wave 2 high shown in the CHART and, from the blue Wave 2 high, a second sequence underway marked by the black Wave 1 low.

7. The pattern is very bearish.

8. It is similar to this one shown here that was also very bearish and preceded the steep price decline:

9. A bullish version of this pattern that did not work out was presented just a couple of days ago here:

10. Today's CHART of daily prices for the continuous spot futures price updates.

11. The blue Wave 1 low / Wave 2 high are shown in the CHART as in the above hourly CHART.

12. The black Wave 1 low is shown as was also presented in the hourly CHART.

13. The movement becomes a bit strained thereafter, and the CHART continues the initial interpretation.

14. What this CHART suggests is that the market is in a blue Wave 3 decline and is about to complete a black Wave 2 high.

15. Just above the red horizontal line, we can see that the distance from the high in the upper left corner of the CHART to the blue Wave 2 high was 28 calendar days.

16. The distance from this blue Wave 2 high to today's high is another 28 calendar days.

17. It's thus been 28+28=56 calendar days since the early May high (FIBONACCI #=55).

18. The thick horizontal pink line shown in the CHART is the point at which the pattern is negated.

19. What we want to note in this CHART versus the one in the previous COMMENT is that the 609 high is quite a bit above the 524 low.

20. This is quite a bit different than the equivalent CHART in the prior COMMENT where the blue Wave 4 high on 609 was quite a bit lower than the blue Wave 1 low on 524, thereby allowing for the impulsive (5 wave) labeling shown by the 5 blue numbers.

21. The pink horizontal line thus becomes of especial importance to the complex since the 524-609 overlap is of such magnitude that it does not allow for the decline from the May high to June low to be interpreted as a 5 wave impulsive movement.

22. The market is thus at an important point now, as it won't require much more upside to negate the black Wave 1-2 movement and cause reassessment of the entirety of sequence from the May high.

23. In other words, risk to short positions is now small relative to potential reward should the market begin a black 3rd wave decline of a blue 3rd wave decline now.

UPDATED 20060630

COMMENT #223

CHART #445

(Post-close COMMENT)

1. The following CHART of weekly prices highlighted last week in the lower right corner:

2. Price was believed to be near a bottom as seen on the daily CHART:

3. The bottom was but a pause, however, and price has since moved lower into the time period listed on the weekly projection as shown in today's update of daily prices in CHART #445:

4. But as can be seen at the bottom of the CHART, this market is not receiving the support from large commercial interests it did in March, August and November of last year.

5. The contracts are in position to rally from the blue boxes projected turns in the lower right corner of the CHART.

6. The three red numbers below the March, May and June lows show that, if the first leg down is assigned a length of 1.000 unit, the second measures .786 X 1st and the third measured .618 X 1st.

7. The last is thus .786 X 2nd.

8. The movement from the January high is thus suggestive of a complete 5 wave impulsive decline.