Human salvation lies in the hands of the creatively maladjusted.

--Martin Luther King Jr.

UPDATED 20060725

COMMENT #255

CHART #s 515-516

(Post-close)

1. The last 2005 review for this market was at the September highs in the following CHART.

2. A decline to the blue WIC projected turn in November then followed (Weekly Inversion Cycle Index).

3. In late December, price had moved to the next set of projected turns and lows as seen in the CHART.

4. From the late December lows, price rallied up into the blue and red boxes shown in the upper right corner of the above CHART.

5. The following CHART expands the perspective and shows the strong resistance the market was experiencing at the boxes.

6. In early March, the following ratio projections occurred at the retest of the January high.

7. In today's CHART #515 of daily prices for the continuous spot futures contract, we can see how price continued the decline to a new low for the year and down into the next WIC blue box projected turn shown at the low in the CHART.

8. From this low, price then rallied to the next blue box WIC projected turn at the new high for the year in May.

9. From the May high, price then declined to the next June blue box WIC projected turn at the low late last month.

10. We can see how price has been moving up into the blue and red boxes in the upper right corner of the CHART.

11. The question is whether the market is going to see a truncated corrective advance as is suggested by the blue a-b seen in today's #515 CHART.

12. The black numbers show that the movement to the blue Wave a high unfolded in the black 5 wave impulsive sequence shown (see pages 283-92 of "The $upertrader's Reference Manual").

13. From this high, price then corrected to the blue Wave b low at the lower ascending blue pitchfork line.

14. We can see that price has corrected 50 percent of the decline as marked by the red horizontal dotted line and up into the price resistance area seen by the light grey shading.

15. Normally, the blue Wave b low would only be expected to have provided the first downleg of a down-up-down sequence of the blue Wave b corrective movement.

16. Once the blue Wave b movement was completed, an advance proportional to the blue Wave a advance would then be expected to occur.

17. This entire process would be expected to lapse a sufficient amount of time as to allow the blue a-b-c corrective process to end around the blue and red boxes shown in the upper right corner.

18. One of the reasons for this review now is because of other markets in the complex which seem to be turning now.

19. Another interesting reason is the net commercial position at the bottom of the CHART.

20. We can see 6 red circles in this CHART.

21. At each of the red circles, we can see how highs formed in price.

22. The net commercial position at the time compared to levels now is seen at the horizontal dashed black line.

23. Especially of interest is the recent experience.

24. As can be seen, the net short position now is about where it was at the May high of the year.

25. Yet price has only recovered about 50 percent of the May-June decline.

26. This rapidity with which the inside money has restored its net short position is normally a bearish event.

27. We can see that the market is apparently attempting to establish the bullish reverse head-and-shoulders top formation seen in the CHART by the three green buckets.

28. This formation is especially of interest in that there are 63 trading days (FIBONACCI #s 3 X 21 = 63) with 92 and 91 calendar days (FIBONACCI #=89) to the left and right of the head low.

29. From this chart pattern only, the 5 wave advance will likely be interpreted in the 1st Elliott Wave up from the right shoulder.

30. Such an interpretation is likely to increase bullish sentiment among many in the trading crowd who will see the blue Wave b low in the CHART as being a blue Wave 2 low (with the blue Wave a high seen in the CHART as being a blue Wave 1 high).

31. Such an interpretation is believed to be an incorrect reading.

32. CHART #516 shows hourly prices through late afternoon for the day session of the continuous spot futures contract.

33. Here we see the market opening this morning and trading above the 713 high for the first hour.

34. From this morning's high, the market then spent the rest of the day in a selloff.

35. This selloff is consistent with the position of more insightful markets in the complex.

36. Hence, the reason for raising the possibility of a truncated corrective rally that ended this morning rather than one that sees, from the 713 high, a down-up-down movement to a blue Wave b low and then a rally to a blue Wave c high around the time of the blue and red boxes in the #515 daily CHART.

37. If it is this extended corrective movement that is to prevail, then from the blue Wave a high on 713, the 719 low should be Wave [A] of blue Wave b and this morning's high should be Wave [B] of blue Wave b.

38. The next event would then be a decline to around the 719 low to complete Wave [C] of blue Wave b and the blue Wave b movement itself.

39. We can see in the #516 CHART that the initial blue Wave a rally covered 288 ticks (2 X FIBONACCI #144=288) and that the advance to the 725 high traversed 153 points (FIBONACCI #=144).

40. The red sloping down trendline in the bottom box show that such momentum oscillators as RSI and Slow Stochastics failed to confirm the new high for the movement this morning, thereby providing an important price / momentum oscillator divergence (see pages 171-84 of "The $upertrader's Reference Manual").

UPDATED 20060725

COMMENT #256

CHART #517

(Very late afternoon COMMENT)

1. CHART #517 updates hourly prices of the following CHART.

2. In today's #517 CHART, the black Wave b low is seen to have occurred a bit after the ideal of 8 & 8 = 16 hours.

3. Instead, 8 & 15 hours were required to set the low.

4. From the low, the market has moved above the black Wave a high.

5. We can see that the high, so far, has required another 8 hours which is the same amount of time as the Wave a advance.

6. Had price risen the same amount as did the black Wave a advance in the same 8 hours, price would have carried up to the upper red channel trendline.

7. Normally, the inability to do so would be interpreted as a sign of weakness.

8. This is not one of those times.

9. We can see how price, today, has held the lower blue ascending pitchfork line.

10. A very important point in time was passed 3 hours after the 8 hour high was set.

11. At such time, the amount of time spent in the movement since the low a week or so ago marked in the CHART by the black Wave 1 is 8+15+8+3=34 hours (FIBONACCI #=34).

12. This point in time is more important because of its relation to the 68 hour decline to the black Wave 1 low (2 X FIBONACCI #34=68) than it is to the FIBONACCI # itself.

13. As the market has chosen the blue ascending lower pitchfork line from which to make its stand and mount its late afternoon rally attempt, two points become of enhanced importance as we move forward late in the day and into the early morning hours tomorrow.

14. The first is the ability to take out the 8 hour high of the (assumed) black Wave c advance.

15. The second is the blue ascending lower pitchfork line from which the market has mounted its late afternoon rally attempt after the 34th hour of the corrective movement.

16. It would be especially important were the market to prove unable to take out the 8 hour high and then reverse and move back through the blue ascending pitchfork line.

17. It would suggest that the black a-b-c movement had been completed and that the black a-b-c movement also completed the black Wave 2 corrective high.

18. This would suggest that the market was set to resume the decline.

19. This interpretation will be negated, however, if the 8 hour high is taken out in which case reassessment will be required.