It behooves every man who values liberty of conscience for himself,
to resist invasions of it in the case of others:
or their case may,
by change of circumstances,
become his own.

--Thomas Jefferson

UPDATED 20060803

COMMENT #274

CHART #s 544 & 545

1. CHART #544 shows daily prices for the continuous spot futures contract.

2. The red lines at the top of the CHART show that the movement from the high in the upper left corner to the high of late last month lasted 55 trading days (FIBONACCI #=55).

3. This movement consisted of a 24 trading day decline to the June low and 31 trading day rally since.

4. The green arrows show that these two segments are in a ratio of 1.292 (SQ RT PHI=1.272).

5. The blue lines above price then show that the movement from the June high to the July high to the late July high lasted 39 trading days (FIBONACCI #s 3 X 13=39).

6. This 39 trading day period consists of a 24 trading day segment and a 15 trading day segment placing the two in a ratio of 1.600 (PHI=1.618).

7. The black box shows that both the red and blue measurements began with a 24 trading day segment.

8. The red ended with a 31 trading day segment and the blue with a 15 trading day segment placing the two in a ratio of 2.067 as shown by the green arrows (PHI X SQ RT PHI=2.058).

9. The total red to blue ratio of 55 trading days to 39 is shown to the right by the green arrows and is 1.410 (SQ RT 2=1.414).

10. It is possible that a rare mid-course head-and-shoulders top is forming in this market as indicated by the three red caps.

11. The red lines below price show how this movement has unfolded.

12. The green numbers show that the two uplegs traversed 665 and 550 (10 X FIBONACCI #55=550) points placing the two uplegs in a ratio of 1.209 (SQ RT PHI=1.272).

13. We can see that price moved up to the center ascending blue pitchfork line late last month.

14. To the very right, the pink horizontal trendline shows 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".

15. CHART #545 shows hourly prices for the same continuous spot futures contract and updates the following two:

16. We can see that the blue Wave II rally covered 126 hours (see the yellow shading) and the black Wave 1 decline / Wave 2 rally 127 hours (equality).

17. A break above the pink horizontal trendline drawn off the blue Wave II high negates the black Wave 1-2 setup (see pages 283-92 of "The $upertrader's Reference Manual").

18. The 42 hour periodicity has been quite important to this market (2 X FIBONACCI #21=42).

19. These perodicities are marked by the light blue shading.

20. The black Wave 2 high occurred at the last rep of this cycle.

21. From the high, the 5 red dots suggest that the market decline in an impulsive sequence to the red Wave 1 low just above the lower red ascending channel trendline.

22. As can be seen, this decline lasted 15 hours followed by a 5 hour rally to yesterday's high, 20 total.

23. 15/5=3.000.

24. 20/5=4.000.

25. The two pink horizontal thin short trendlines show where the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual" has already been triggered yesterday (upper line) and will be triggered again today (lower line).

26. Hence, the market is set up for short side entry on both the daily and hourly CHARTS.

UPDATED 20060803

COMMENT #275

CHART #546 - 548

1. CHART #546 shows daily prices for the contracts indicated.

2. The feature of this group is the breakout to new highs of the contract in the upper right corner.

3. As can be seen at the red horizontal line in the other contracts, the aforesaid breakout has not been accompanied by a similar breakout by any of the other markets, thereby forming important intermarket divergences (see pages 283-92 of "The $upertrader's Reference Manual").

4. The break above the green down trendlines by the other markets, however, does signal caution given the breakout of the market in the upper right corner.

5. CHART #547 shows hourly prices for the October contract.

6. We can see how this market declined from the July high in what appears to be a 5 wave impulsive sequence.

7. Such is not, in and of itself, conclusive, but it does suggest that the trend has turned down in this market.

8. But, then again, such was the expectation seen here:

9. The 3 legged advance from the blue Wave 1 low suggests a counter-trend corrective movement to the blue Wave 2 high shown in the upper right corner.

10. CHART #548 shows daily prices for the continuous spot futures contract and ratifies the hourly CHART.

11. Here we see price peaking in the red boxes at the high of the year and then declining down into the blue and green boxes to the blue Wave 1 low.

12. This low lasted 21 trading days (FIBONACCI #=21) and was followed by another 21 trading day segment to the blue Wave 2 high.

13. From this high, the black Wave 1 decline / Wave 2 advance is suggested.

14. This movement lasted 5 & 8 = 13 trading days total (FIBONACCI #s=5, 8 & 13) to yesterday's high.

15. Hence, from the high of the year, the movements shown have covered 21 + 21 + 13 = 55 trading days total (FIBONACCI #s = 13, 21 & 55).

16. At the bottom of the sheet, we can see how this market has entered the period of time when the TREND INDEX from the cycles sheet for this market in the April-September edition of "The 2006 $upertrader's Book of Linear Time Cycles" is suggesting lower prices.

UPDATED 20060803

COMMENT #276

CHART #s 549 & 550

1. CHART #549 shows hourly prices for the December contract and is a continuation of the following:

2. We can see that price has moved back up into the grey shaded area representing the gap to the left.

3. This movement has taken price back up to the red horizontal dotted line at the .618 price retracement level.

4. The two short red lines show that such momentum oscillators as RSI and Slow Stochastics are failing to confirm the new high yesterday, thereby forming important price / momentum oscillator divergences (see pages 171-84 of "The $upertrader's Reference Manual").

5. The blue numbers suggest that the decline unfolded in a 5 wave impulsive sequence, thereby suggesting that trend has turned down.

6. We thus label the decline with the black Wave 1 low shown in the CHART.

7. From the low, the market appears to have unfolded in the black counter-trend A-B-C correction shown to yesterday's high which we label Wave 2 (see pages 283-92 of "The $upertrader's Reference Manual").

8. CHART #550 shows hourly prices for the continuous spot futures contract.

9. Here we see a little bit different pattern, but still one that appears to have unfolded in the black Wave 1 decline and Wave 2 rally up to the blue center ascending pitchfork line.

10. The suggestion is that price is about to decline.

11. The pink horizontal trendline shown to the right of price shows that this market is set up to trigger sell short entry into this market today.

12. The reason we use such trading techniques as the cited one is because we want the market to force us into the position by acting in the expected manner.

13. For example, yesterday, this market was set up in similar manner.

14. However, as the market moved up, the entry trigger was not elected, the trade not entered and a loss avoided.

15. Such techniques as the one cited are simple to use.

16. However, they should not be used indiscriminately, but only when the setups are aligned and suggesting an important top or bottom (or acceleration).