"It's illegal to say to a voter "Here's $100, vote for me."
So what do the politicians do?
They offer the $100 in the form of Health Care, Social Security,
Unemployment Insurance, Food Stamps, tobacco subsidies,
grain payments, NEA payments, and jobs programs."

--Don Farrar

UPDATED 20060707

COMMENT #228

CHART #452

1. CHART #452 shows daily prices for the continuous spot futures contract.

2. The red up and down arrows represent Astro Turning Point dates from the 1st and 2nd half editions of "The $upertrader's Almanac".

3. We can see how price has moved up from the blue and green WIC and WLC boxes at the bottom of the CHART (Weekly Inversion Cycle Index projected turn and Weekly Linear Time Cycle Index projected low).

4. Until the pink horizontal line shown in the middle of the CHART is broken, the assumption is that this market has experienced the blue Wave 1 decline to the May low shown and blue Wave 2 corrective rally to the early June high shown (see pages 283-92 of "The $upertrader's Reference Manual").

5. From the blue Wave 2 high, the market is then believed to have experienced a second black Wave 1 decline and black Wave 2 corrective rally as marked in the CHART by the black 1-2 sequence.

6. We can see that this second 1-2 sequence has lasted 8 trading days to the June black Wave 1 low and 13 to the black Wave 2 high on Monday, 21 total (FIBONACCI #s=8, 13 & 21).

7. This puts the decline / advance in PHI proportions as 13/8=PHI, 21/8=SQ PHI and 21/13=PHI.

8. We can see how Monday's high related to the grey dashed down pitchfork line, the up red upper red channel trendline and the blue center ascending pitchfork line.

9. More important, price has moved up into the red and blue boxes in the upper right corner from the blue and green boxes at the bottom of the CHART.

10. We can boil what to do down to the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual" which is set up to provide sell short entry today.

11. The attractiveness of the situation is seen in the proposition that if the market is, in fact, just now ready to experience a black Wave 3 decline of a blue Wave 3 decline (a 3rd of a 3rd), the reward will be very large relative to the risk in the trade.

UPDATED 20060707

COMMENT #229

CHART #s 453-458

1. CHART #453 shows daily prices for the day session contracts for the continuous spot futures contract and the December, August and October futures contracts.

2. In the upper left corner, we can see that the continuous spot futures contract has made a new price high for the period shown.

3. The red horizontal line in the other CHARTS show that the December and August have failed to confirm this new high, thereby forming an intramarket price divergence (see pages 171-84 of "The $upertrader's Reference Manual").

4. The vertical red line in the left column is especially interesting.

5. Here we see that the continuous spot futures contract has held above the May low whereas the May low was broken in the August contract.

6. This suggests that the June low in the bottom CHART has marked a Wave 4 low as recently discussed in the continuous spot futures contract (see pages 283-92 of "The $upertrader's Reference Manual").

7. CHART #454 shows some deferred contracts for next year.

8. Here we see all contracts making new highs for the move.

9. We had observed here the divergence that had occurred between the continuous spot and December contracts:

10. The deferred contracts in the bottom row of CHART #454 peaked even later.

11. In the bottom right chart of the December 2007 futures contract, we can see a reassessment since the February low.

12. The essence of this CHART is the blue A-B-C movement from the May high to June and subsequent advance to new highs.

13. What is interesting about this CHART is that the blue Wave 1 and blue Wave 5 uplegs are about equal at 11 trading days each and 600 ticks.

14. In between is that blue Wave 3 advance of 43 trading days, or about twice that of W1+W5.

15. CHART #455 shows monthly prices and updates the situation from a longer perspective.

16. As discussed recently, a July high is consistent with the information in this CHART.

17. CHART #456 shows hourly price for the December futures contract.

18. We can see that the rally from the June low began with the price/momentum oscillator divergence shown in the lower left corner by the two sloping red lines (see pages 171-84 of "The $upertrader's Reference Manual").

19. The blue numbers suggest the 5 wave Elliott Wave impulsive movement shown.

20. Here we see a very abbreviated blue Wave 5 advance.

21. But the short red sloping lines in the upper and lower right corners show that such momentum oscillators as RSI and Slow Stochastics are failing to confirm the new price highs just as the failed to confirm the price lows at the beginning of the rally.

22. The blue up trendline is thus believed to be of importance to this market.

23. CHART #457 shows daily prices for the December contract.

24. Here we see that such momentum oscillators as RSI and Slow Stochastics are also failing to confirm the price high shown from a daily perspective, thereby forming an important price/momentum oscillator divergence and enhancing the price/momentum oscillator divergence seen in the preceding hourly CHART.

25. The high earlier this spring was triggered by the following CHART, among others:

26. Price then bounced from the small green box and retested the price high at the large red box.

27. CHART #458 updates.

28. Here we see this important index failing to confirm the new high discussed above.

29. The previous high is noted by the pink horizontal trend line.

30. We can see how price has advanced from the blue and green boxes at the June price low.

31. While the advance to the high shown in the upper left corner lasted 33 trading days, the decline thereafter to the June low has lasted 34 trading days (FIBONACCI #=34).

32. The momentum oscillator line at the bottom of the CHART suggests that price still has a little more to go on the upside.

33. If this is correct, then the black Wave 1-2 sequence probably suggests that the market is now only about to peak a black Wave 3 and then be in position for a price/momentum oscillator divergence in a few days.

34. The ideal would be on the date in the upper right corner when the time measurements shown will occur.

35. While such might be true for the market shown, it should be remembered that the futures contracts are already experiencing their divergences now.

36. The CHART shown thus does not negate the expectation of a peaking market.

UPDATED 20060707

COMMENT #230

CHART #459

1. A couple of months ago, the following CHART of weekly prices suggested that an important price and reverse head-and-shoulders bottom was forming:

2. The price low was occurring about the .786 price retracement level of the prior advance (see pages 184-7 of "The $upertrader's Reference Manual") as seen by the red dotted horizontal line.

3. It was noted that should the sharp price decline shown end at the May low, the entire reverse head-and-shoulders chart pattern would be well-balanced at 58 up and 58 down weeks.

4. From a daily perspective, for various reasons, the 1 ½ year up and down movement was presented in the following CHART of daily prices for the cash index as having formed the blue Wave [A] advance / blue Wave [B] decline seen here:

5. A couple of weeks later, it was suggested that the market might have one more leg down as seen here:

6. Not all contracts experienced the blue Wave 5 decline shown here:

7. … as was shown at the time.

8. However, even where the decline was seen, the market was believed to have completed the blue 5 wave decline shown.

9. From the low, a nice initial leg up was seen, but price had moved up into the blue WIC (Weekly Inversion Cycle Index projected turn) shown in the following CHART:

10. The assumption was that the market was in position to accelerate sharply as seen by the inverse relationship shown in the following CHART:

11. But such acceleration was not the case, as seen in today's CHART #459 of daily prices for the continuous spot futures price.

12. Throughout the last two month's trading, we can see that commercial interests have maintained a very bullish net long position as shown by the red line in the bottom box.

13. The short red lines in the middle box show how price diverged with such momentum oscillators as RSI and Slow Stochastics both at the May low and June high (see pages 171-84 of "The $upertrader's Reference Manual").

14. The red dashed line shows the .786 percent price retracement discussed above.

15. The assumption now is that, from the June low, the market advance 6 trading days to the 613 high and then declined in a 6-2-7=15 trading day movement to Wednesday's low, 21 total (FIBONACCI #=21).

16. This 21 trading day segment is similar to the one from the May low to 613 high.

17. This movement suggests the Elliott Wave 1-2 sequence marked in the CHART by the black 1 & 2 shown with the black Wave 2 decline unfolding in the black a-b-c legs shown.

18. We can see that price has retraced about 50 percent of the black Wave 1 advance (see the red dotted horizontal line).

19. When we take a closer look at the price action over the last few days, we can see that this market is set up for long side entry today via the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual".

20. If the market is about to enter a black Wave 3 advance, the black dotted horizontal line shown at the top of the CHART should wind up being exceeded.

21. Again, risk to this position is minuscule relative to potential reward, thus providing a large reward : risk ratio.