You do not become a "dissident" just because you decide one day
to take up this most unusual career.
You are thrown into it by your personal sense of responsibility,
combined with a complex set of external circumstances.
You are cast out of the existing structures
and placed in a position of conflict with them.
It begins as an attempt to do your work well,
and ends with being branded an enemy of society.

--Vaclav Havel

UPDATED 20060724

COMMENT #253

CHART #s 508-509

(Posted late morning, Monday, 20060724)

1. A couple of months ago, the following CHART of daily prices for the continuous spot futures market suggested a very important top was forming:

2. From the top that formed, the market declined, but, a month later, was seen as being at a key support point because of the manner in which the decline, to date, had unfolded and because of the green and blue boxes in the lower right corner.

3. The green box marks the MLC (Monthly Linear Time Cycle Index projected low) while the blue box represented the WIC (Weekly Inversion Cycle Index projected turn).

4. Because price was moving down into these boxes, the importance of the boxes was enhanced due to the actual price action of the market itself versus the projections shown on the CHART.

5. At the bottom of the CHART, we could see that the short green sloping trendline was not diverging with the price action but was confirming the decline and that the net position of commercial traders was very bearish.

6. The conclusion was thus that the market should continue lower.

7. The blue dots in the next CHART of daily prices into the low of a couple of weeks later show how the market did decline in the 5 wave impulsive movement shown from the black Wave 4 high to the black Wave 5 low (see pages 283-92 of "The $upertrader's Reference Manual").

8. This low occurred at the green and blue box MLC / WIC alignment as shown in the CHART.

9. The two short red lines show that the market had experienced a momentum oscillator / price divergence at the low (see pages 171-84 of "The $upertrader's Reference Manual").

10. As the decline to the low appeared to have unfolded in the 5 wave impulsive sequence marked in the CHART by the 5 black numbers, the decline was labeled as a blue Wave 1 decline meaning that, from this low, the market was believed to be correcting the decline in a blue Wave 2 advance/correction/counter-trend movement.

11. From the low, the black Wave A high of 707 appeared to be complete (of an expected A-B-C movement).

12. The ensuing low was labeled as a possible black Wave B low and the pink horizontal line added to allow for the possibility of an abbreviated black Wave C high.

13. The next day, the break of the horizontal pink line allowed for the possibility that the blue Wave 2 high had been set early as was shown in the following updated CHART:

14. Price then moved lower and the pink horizontal trendline was lowered as shown in the next CHART.

15. It was necessary that this support be taken out to confirm that the market was, in fact, in a blue Wave 3 decline where acceleration/down gaps and so on are expected to occur.

16. Today's CHART #508 of daily prices updates.

17. Here we can see that price did not move lower and has now approached the upper red ascending channel trendline shown in the CHART.

18. The suggestion presented in the CHART shows the up-down-up sequence from the blue Wave 1 low as having unfolded in the manner presented.

19. If correct, such movement suggests that the blue Wave 2 high shown in the CHART was either completed Friday or will be completed today.

20. The blue lines at the top of the CHART show that the decline / advance, or blue Wave 1 / blue Wave 2 sequence, are in an approximate relationship of 2.000 : 1.000 Friday in terms of calendar days.

21. The black text in the CHART shows how the two are in approximate PHI relationships today.

22. This latter relationship has become of importance when viewed in terms of hourly prices for the overnight session in CHART #509.

23. Again we see the blue Wave 1 low in the lower left corner, blue a-b-c rally and blue Wave 2 high in the upper right corner.

24. The black text again shows that the movement has formed in PHI proportions.

25. From the blue Wave 2 high, the market's initial reaction in the decline shown over the last few hours is in accordance with expectations in that the decline appears impulsive.

26. We thus label that decline and ensuing correction from this morning's low as the red Wave 1 decline / Wave 2 corrective advance shown in the CHART.

27. The assumption is that the market has set an important retest high just this morning and is now about to accelerate downwards.

28. This high, though a week early, is consistent with the blue WIC box shown in the #508 CHART of weekly prices.

29. This interpretation should be applied to other markets in this complex.

30. A break of the blue Wave 2 high negates.

UPDATED 20060724

COMMENT #254

CHART #s 510-513

1. We were reviewing weekly prices for this market the week before the all-time high.

2. How the high occurred was shown in the following CHART as due to a short squeeze in the spot contract.

3. The high occurred as the continuous spot futures contract moved up into the blue and red boxes.

4. Today's CHART #510 updates weekly prices.

5. The three segments marked by the blue lines are each about 34 weeks in length (FIBONACCI #=34).

6. From the all-time high, the market declined 24 weeks to the low that occurred earlier this year before rallying 10 weeks to this year's high.

7. The market as since declined 3 weeks followed by a 2-3-3=8 week rally.

8. 8/3=SQ PHI (2.618).

9. This week's high is 10+3+8=21 weeks from this year's low (FIBONACCI #=21).

10. The three red hats show a series of lower highs.

11. From this year's high, the 11 week sequence shown in this CHART suggests a Wave 1 decline followed by an a-b-c correction to a Wave 2 high this week (see pages 283-92 of "The $upertrader's Reference Manual").

12. However, when we look at daily prices for the continuous spot futures contract in CHART #511, we see that price is just now making a new high for the year.

13. The reason for the difference in the #510 and #511 CHARTS is that #510 of weekly prices shows prices for the cash index while #511 shows futures prices.

14. The #511 CHART is of interest for other reasons.

15. We can see that price has moved up into the WIC (Weekly Inversion Cycle Index projected turn from the April-September edition of "The $upertrader's Book of Linear Time Cycles" at a time when such momentum oscillators as RSI and Slow Stochastics (see pages 171-84 of "The $upertrader's Reference Manual") are forming important price / momentum oscillator divergences and the net position of commercial interests have moved to new net short levels over the last ½ year or so.

16. CHART #512 shows daily prices for the December contract.

17. Here we see price as having moved up into the red upper ascending trendline as the divergence occurred.

18. From the high, the market appears to have declined in a 5 wave impulsive sequence and is thus labeled as the black Wave 1 decline shown in the CHART.

19. CHART #513 shows daily prices for the September futures contract.

20. This CHART is through the close of today's price action whereas the above CHARTS are through Friday.

21. We can see that this market has retraced about .786 of the decline from the mid-July high.

22. The red caps suggest the possibility that a head-and-shoulders top is forming with 8 trading days to the left shoulder and 5 to the right, 13 total (FIBONACCI #s=5, 8 & 13).

23. The pink horizontal line to the right shows the price level where this market is set up for short side entry via the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual".

24. We can see that price is approaching the upper up red channel trendline, but that it has not quite reached said trendline yet.

25. One of the problems with the drawing of this upper channel trendline is that it cannot be seen on the daily CHART exactly where the end of the initial upthrust from the 2 day low peaked.

26. It is thus not possible to tell exactly from where the channel trendline should be drawn.

27. CHART #514 shows hourly prices for the September contract.

28. Here we can see the upper red ascending channel trendline intersecting today's high.

29. Let's focus on the high in the upper left corner, however.

30. The green down channel appears to have unfolded in a 3 legged a-b-c corrective movement as shown in the CHART.

31. The two highs at the red caps are equal in price as noted by the red dotted horizontal line.

32. The three red caps suggests a head-and-shoulder top formation with 5 hours on either side of the head.

33. The green down channel, however, suggests that the true high in this move actually occurred at the right shoulder.

34. From that high, the market then declined sharply over the next 6 hours to the low shown.

35. The 6 hours is marked in the CHART by the blue number and box.

36. The advance to the .786 retracement level identified in the CHART by the red horizontal dotted line appears to be very choppy with many overlaps and false starts.

37. The blue number and box in the upper right corner shows that this advance from the low lasted 16 hours.

38. Hence, 6 down, 16 up, 22 total (2 X FIBONACCI #3=6, 2 X FIBONACCI #8=16, FIBONACCI #=21).

39. 16/6=8/3=SQ PHI (2.618).

40. The blue Wave 2 advance appears to have unfolded in a 9-4-3=16 hour movement with 12 up and 4 down.

41. 12/4=3.000.

42. 16/4=4.000.

43. We can see that the blue Wave A upleg measured 850 ticks with 700 in the blue Wave C.

44. In price, WA / WC = 1.214 (SQ RT PHI=1.272).

45. In time, WA / WC = 9/3 = 3.000.

46. From the blue Wave B low, it is difficult to determine whether the blue Wave C is complete or whether the last bar today formed the 4th wave low of an expected 5 with the 5th yet to occur.

47. The presentation is that the movement is complete as presented at the blue Wave 2 high.

48. The pink horizontal trendline shown in the CHART shows where the page 205-9 trading technique is triggered on the daily CHART.

49. Such approaches can be used on the hourly CHART to obtain better entry with more risk.

50. In the #514 CHART, such a pattern has not yet formed.

51. The thin horizontal pink line to the right of price can nevertheless be used to obtain entry because, if broken, it will suggest that the blue Wave C advance is complete and that the low at said line the last hour today is not a 4th wave low.

52. A break of the blue Wave 2 high negates and will cause reassessment.