"Nearly all men can stand adversity;
but if you want to test a man's character,
give him power."

--Abraham Lincoln

UPDATED 20060828

COMMENT #307

CHART #613

(Post-close COMMENT)

1. This COMMENT is being dated as of Monday so it can be separated from Tuesday's information.

2. The CHARTS below update the events of the last few weeks in the complex.

3. The idea is to follow the "tops down" trading approach starting with the longer term monthly/weekly CHARTS and moving down to the daily/hourly CHARTS.

4. The high in the first market was made here:

5. The monthly perspective was twice presented with the last being shown here:

6. This interpretation and 5 wave advance marked by the blue numbers is of utmost importance to the other markets inside the complex and to many others outside the complex (see pages 283-92 of "The $upertrader's Reference Manual").

7. If the blue 5 wave advance is correct, the 8 year advance is complete as shown.

8. The high is shown in the upper left corner of the next two hourly CHARTS.

9. The initial decline at the time of those two CHARTS was believed to be complete along with a retest of the high for the year shown in the first CHART.

10. The next CHART shows how the continuous spot futures contract appeared to be making a new high early in the month unconfirmed by other contracts in the complex (see pages 171-84 of "The $upertrader's Reference Manual").

11. The December contract was seen as having completed an important high in the next CHART, the initial 5 wave impulsive decline, and the blue a-b-c correction here:

12. Some extremely bullish fundamental news occurred that was unable to push price through the July high in the December contract as seen here:

13. The ascending diagonal triangle was thus not broken and price began its descent by breaking the lower blue expanded ascending pitchfork line and the lower thick red ascending diagonal trendline.

14. A reassessment of the blue 1-2 Elliott Wave sequence was necessitated by the bullish fundamental news.

15. The next CHART shows the monthly perspective:

16. A 5 wave impulsive sequence is shown that, if correct, ratifies the monthly CHART in the first market above in that it suggests that the advance from the low shown in the lower left corner is complete.

17. An important aspect of this CHART is that it also shows that last year's high was not broken on the current rally.

18. The next CHART of weekly prices is even more dramatic.

19. Here the three red caps show a series of lower highs into the bullish fundamental news at the beginning of the month.

20. The next CHART shows how a similar divergence between the individual contracts was also occurring in this market:

21. The next two CHARTS of daily prices show how the bullish fundamental news did cause a reassessment as seen in the two CHARTs even though the news was unable to move price into new high territory.

22. The next CHART shows weekly prices.

23. Interestingly, this market has been moving lower over the last several months.

24. The market was believed to have formed an important high at the beginning of the month well below what would be a normal price retracement of the decline shown.

25. The hourly perspective showed how the market appeared to be in place, or to be close to being in place, to resume trend downside acceleration.

26. With that background, we want to view today's CHART of daily prices for the continuous spot futures contracts.

27. We can see how the market is moving to new lows for the move yesterday, but that this decline is not being confirmed by the others as noted by the horizontal red lines.

28. But the reason for this CHART now is because of the manner in which the decline has occurred in the CHART in the upper left corner.

29. The 5 blue numbers suggest and impulsive Elliott Wave sequence followed by the blue a-b-c correction.

30. The pink text shows that the decline occurred over 8 trading days and that the advance occurred over 5 trading days, 13 trading days total (FIBONACCI #s=5, 8 & 13).

31. It is very possible that this market is about to accelerate lower.

32. Should such be the case, the 808 high (which, remember, was a retest of the July high and not a new high), will be seen as a Wave II high and the red Wave 1-2 sequence shown in the CHART will be waves 1 & 2 of III.

33. If correct, this would mean that the market is in Wave 3 of III now and that the Wave 3 of III decline began at the red Wave 2 high.

34. If such is the case, the markets in the right column, instead of holding the horizontal red lines these markets are now sitting on, will move decisively through the red horizontal trendlines shown.

35. CHART #614 shows how this market is unfolding for the December contract.

36. As can be seen, even in this contract, which also made a new low for the move yesterday, the market appears to be at a very minor support point which would suggest a minor pause.

37. In summary, if the market is in extremely weak position, the red down trendline, grey horizontal box and pink upper horizontal trendline will not be broken prior to price taking out the lower pink horizontal trendline shown.