JULY COMMENTS
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Comment numbers for 20060705 225 226 227
GENERAL COMMENTS
"It would indeed be ironic if,
in the name of national defense,
we would sanction the subversion of one of the liberties . . .
which makes the defense of the Nation worthwhile."
- United States v. Robel, 389 US 258, 264 (1967)
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1. We always want to be aware of those projected turning points on page 368 of "The 2006 $upertrader's Almanac - 1st Half Edition".
5. Click here to access our new charting service!
CURRENT COMMENTS
"A protective tariff is a typical conspiracy in restraint of trade." UPDATED 20060705
COMMENT #225
CHART #S 447 & 448
1. The following CHART of monthly prices is from "The 2006 $upertrader's Almanac - 1st Half Edition" and shows how the important low of a few years ago was formed.
2. The low was also seen here in the daily CHART.
3. Just a few days ago, the market was believed to be in position to form an important high around the blue dashed down trendline shown in the following CHART of hourly prices.
4. One possible outcome would see the high produce the black Wave B high shown (see pages 283-92 of "The $upertrader's Reference Manual").
5. This outcome was not favored, however, as the high a few months earlier had formed a more important high.
6. The following CHART of daily prices was also presented which showed how price was rallying up along the lines shown.
7. Price has moved up to the intersection of the red, dashed pink and green up trendlines shown in the above CHART.
8. What we want to do next is to take a look at monthly prices.
9. The rally shown began at the lows shown in the first two CHARTS in this COMMENT from several years ago.
10. If the blue advance is assumed to have followed, and if that advance were to peak this month, the movement would have followed, in months, in the sequence shown by the blue text in the middle of the page.
11. There are several interesting relationships shown immediately below, most notable of which are the two 3.000 ratios between the advancing legs and the total number of 89 months in the advance (FIBONACCI #=89).
12. The blue Wave 3 advance is, in turn, seen as having unfolded in the manner marked in the CHART by the 5 black numbers.
13. The black text in the lower right corner reports the number of months of this blue Wave 3 advance.
14. Two alternatives are also presented, with Alternative #2 being the one of most interest.
15. The green numbers above the advancing legs shows the extent of the uplegs.
16. Obviously, there are several very interesting relationships which suggest that the movement as labeled in the CHART, from a price perspective only, is the correct one.
17. These relationships are shown by the two green boxed numbers and the two light blue boxed numbers.
18. As the interpretation assumes a high in July, the question is whether any of the contracts have made a new this month.
19. CHART #448 shows daily prices for several of the various contracts.
20. In all instances, we can see that the new high has not yet been seen this month.
21. Several interesting divergences are marked by the colored lines (see pages 171-84 of "The $upertrader's Reference Manual").
22. We can see how the spot futures contract and December contract in the bottom row have both been weaker of late than has the continuous spot futures contract in the top row.
23. The market is at an ideal point to set a retest high.
24. A new high this month, however, can be seen as not negating the expectation of an important high forming in this market.
UPDATED 20060705
COMMENT #226
CHART #s 449-450
1. CHART #449 shows weekly prices.
2. The low in the lower right corner occurred almost exactly on the two year anniversary of the high shown in the upper left corner.
3. The red vertical lines shown an approximate 6 week cycle with a 29 week marked by the blue lines.
4. The two black boxes suggest two advancing legs of 5 weeks each.
5. CHART #450 shows daily prices and updates the following CHART of early last month.
6. At the time, it was not certain whether the blue MIC (Monthly Inversion Cycle Index) projected turn marked in the CHART should be placed below or above price.
7. As the black Wave 1 high / Wave 2 low shown in the CHART was believed to have been set as shown (see pages 283-92 of "The $upertrader's Reference Manual"), the bottom box was shaded in the bright blue.
8. The light blue box above price was to allow for the possibility that price would se an important high.
9. Such a high would not really have fit well with the blue Wave 1-2 sequence followed by the black Wave 1-2 sequence.
10. Hence, the light blue shading.
11. The blue reverse head-and-shoulders chart formation marked in the CHART by the three green buckets suggested high prices.
12. The blue boxes showed that price was turning at the blue WIC (Weekly Inversion Cycle Index projected turns) throughout the year.
13. Today's #450 CHART of daily prices updates and shows that, from the blue Wave 2 low, price rallied 26 trading days to the May high and then declined 27 trading days to last week's low, 53 total (FIBONACCI #=55).
14. The distance from the low of last fall was thus 91 trading days to the April low and 53 since, 144 total (FIBONACCI #s=55, 89 & 144).
15. The two Elliott Wave sequences (the first is blue, the second black) are thus in PHI proportions.
16. From the black Wave 1 high, we can see that the black Wave a-b-c corrective movement to last week's low has necessitated moving the black Wave 2 low from the 601 low to last week's low.
17. The green circles in the bottom box show that commercial interests have supported price at each of these two lows.
18. The blue Wave 2 low was marked here.
19. Last week's low was marked by the release of this report.
UPDATED 20060705
COMMENT #227
CHART #451
1. The question of the next few days will be how the market reacts to the blue Wave 2 high shown in the following CHART of daily prices for the continuous spot futures contract.
2. 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").
3. The blue lines show that today is the 21st calendar day since the high last month and is 42 from the May low (FIBONACCI #=21 & 2 X FIBONACCI #21=42).
4. It is the 56th calendar day from the May high (FIBONACCI #=55).
5. At the bottom of the CHART, we can see that it has been the small speculator who has been buying this rally while the commercials have been adding to net short positions.
6. Although not determinative in and of itself, the spread between the two shown (the black and red lines) is the widest it has been in over 3 years (a bearish development).
2. We always want to be aware of those "Inversion Cycle Indexes" in the weekly pages of the April through September edition of "The 2006 $upertrader's Book of Linear Time Cycles" which is available in an easy-to-use electronic format. A sample of the format for the charting file may be seen in the NOTICE posted here. Ordering information here!
3. The initial issue of the free "Trading on the Edge" E-Zine was released 20001021. Archived copies are available here. Subscription information here.
4. NOTICE of refund and cancellation polices may be accessed here.
--Thorstein Veblen, economist
