AUGUST COMMENTS
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Comment numbers for 20060821 299 300 301
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 376 of "The 2006 $upertrader's Almanac - 2nd Half Edition".
5. Click here to access our new charting service!
CURRENT COMMENTS
The beginning of thought is in disagreement -- UPDATED 20060821
COMMENT #299
1. The Commodity Futures Trading Commission recently altered the reporting procedure for the Commitment of Trader's Report.
2. The following link describes the changes.
3. www.cftc.gov/cftc/cftccotnotice080406.htm
4. At their site, one can see the markets affected.
5. A second report asking for commentary on a proposal that could conceivably terminate the reporting of the COT data is also available at the link.
UPDATED 20060821
COMMENT #300
1. Page 17 of this week's Barron's contains a pretty good article on the dollar.
UPDATED 20060821
COMMENT #301
CHART #s 603-604
1. CHART #603 shows weekly prices and is an update from last month.
2. The vertical lines show troughs in the red line in the bottom box representing the net commercial Commitment of Trader's position.
3. We can see how well the troughs have aligned with important tops in the past with the exception of the two green vertical lines.
4. To the far right of the CHART, the thin green line marked the high in the red line at the bottom of the page and, also, the July price low.
5. But as can be seen, the red line has now returned to a new low for the 8 year period shown while price has been unable to attain a new high.
6. At the same time, directly opposed to the smart money commercials are the large speculative interests (primarily hedge funds).
7. The net position of these traders is shown in the CHART by the thin black line.
8. As can be seen, this line just did more to new 8 year highs in this market.
9. The result of the movement in the two lines is a widening of the spread as can be seen in the CHART.
10. This widening is very bearish.
11. The red horizontal dotted line shows that price has retraced about .618 of the 46 week decline to the blue Wave A low (LUCAS #=47).
12. Thereafter, a 29 week rally followed to the blue Wave B high (LUCAS #=29).
13. 75 weeks total (LUCAS #=76).
14. The successive LUCAS #s tell us that the down/up movement are in an approximate PHI relationship with respect to time.
15. The exact ratios can be seen in the blue text in the CHART.
16. The blue Wave B high is thus in PHI relationship both with respect to time and price.
17. CHART #604 is also of weekly prices and is an update from last month.
18. Here we see just the last few years.
19. The movement from the low in the lower left corner to the blue Wave B high shown in both CHARTS lasted 144 weeks (FIBONACCI #=144) as noted in the bottom of the CHART by the blue horizontal arrow.
20. The blue Wave A-B movement shown in the #603 CHART remains (see page 283-92 of "The $upertrader's Reference Manual").
21. The three red caps continue to suggest a head-and-shoulder chart formation that, if correct, is bearish for price.
22. From the head at the top of the CHART, the left shoulder, as reported by the black text at the top, lasted 45 weeks (LUCAS #=47) with 75 on the right (LUCAS #=76).
23. 120 total (LUCAS #=123) from the left shoulder high to the right shoulder high.
24. 144/120=1.200 (SQ RT PHI=1.272).
25. Since we again, as in the #603 CHART, have successive LUCAS #s, we know that the head-and-shoulders topping formation shown is in approximate PHI relationships.
26. The actual ratios are, again, shown in the blue box.
27. At the bottom of the CHART, we can see that the two outside segments of 24 & 29 = 53 weeks (FIBONACCI #=55) and the two inside segments 45 - 46 = 91 weeks (FIBONACCI #=89).
28. From the blue Wave A neckline low, the blue Wave B advance is presented as a completed 3-legged advance as noted by the blue a-b-c.
29. The length of the Wave a of B and Wave c of B legs measures 686 and 1156 ticks.
30. These lengths are reported in the upper right corner of the CHART and are in a ratio of 1.685 (PHI=1.618) as seen by the green number by the black bracket.
31. On this weekly CHART, the market appears to have declined 2 weeks from the blue Wave 2 high to the black Wave 1 low and then rallied in an up-down-up sequence to the black Wave 2 high (see pages 283-92 of "The $upertrader's Reference Manual").
32. From the black Wave 2 high, we can see that this market is set up to provide short side entry on the weekly CHART via the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual".
33. This entry price level is marked on the CHART by the lower thin pink horizontal line.
34. This short sale setup on the weekly CHART is negated on a break of the upper short horizontal pink line.
35. It would take a break of the upper pink horizontal line to negate the blue Wave A-B topping outlook presented in the CHART.
36. Hence, risk to short positions is very small relative to potential reward should the market produce the expected blue Wave C decline.
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.
not only with others but also with ourselves.
--Eric Hoffer
