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UPDATED 20060905

COMMENT #311

CHART #s 621-624

1. The market on the left of daily cash prices in CHART #621 has benefited of late from the decline in price of the market on the right.

2. CHART #622 shows daily prices for the continuous spot futures price.

3. The blue lines below price show that the current rally has unfolded in the two segments of 23 & 34 trading days, 57 total, through today (FIBONACCI #s=21, 34 & 55).

4. The two red ascending trendlines mark an ascending diagonal triangle which is still believed to be a bearish formation as it relates to this market and complex.

5. The red lines below price show that the distance from the low in the CHART to Friday's high is 56 trading days (FIBONACCI #=55).

6. The three red arrows in the upper right corner are from page 376 of "The 2006 $upertrader's Almanac - 2nd Half Edition".

7. Note the "cluster" marked in the "NOTES" section on this page at the very bottom.

8. CHART #623 updates daily prices for the continuous spot futures price of just a few days ago.

9. The interesting reflective symmetry shown in the CHART was expected to be of greater importance to this market than it turned out to be.

10. In today's CHART #623, we see that the 29 day segment above and below price has become a 34 trading day segment above and below price at the dates shown in the CHART.

11. Hence, the ratio between the 47 trading day segment (LUCAS #=47) had changed from PHI to 1.382 (1.000 + SQ [ 1/PHI] = 1.382) versus the shorter segment of 34 trading days (FIBONACCI #=34).

12. We can see how price held the lower ascending red trendline in the prior CHART and the lower ascending blue pitchfork.

13. This ability of price to remain above this trendline has allowed price to continue through Friday's high.

14. The blue line shows two interesting equal segments of 80 trading days at the anniversary of the 20050707 London Bombing.

15. The update of the following recent hourly CHART …..

16. ….. is shown in today's CHART #624 of hourly prices for the cash index.

17. The black text in the lower right corner is for the advance marked in the CHART by the black numbers beginning at the blue Wave 4 low (see pages 283-92 of "The $upertrader's Reference Manual") and assumes a high the first hour today.

18. The blue text is for the advance from the low shown in the lower left corner of the CHART to each of the blue numbers shown and also assumes a high the first hour today.

UPDATED 20060905

COMMENT #312

CHART #625

1. A few days ago, we had been looking at the price action in the following CHART of the December contract.

2. The question was whether this market, and, possibly, the complex, would see a downward corrective wave similar to what was seen several years ago as shown at the blue box in the following CHART:

3. Today's CHART shows that this market proceeded to trade into the grey horizontal boxes shown and held the price support marked by those boxes and by the thin pink horizontal trendline.

4. The most bearish assumption possible was presented in the December contract as marked by the red Wave II high at the beginning of August.

5. One of the problems discussed was the impulsive advance seen from the 724 low to the 802 high as marked by the 5 blue boxes and, then, the impulsive decline seen from the 802 high to the 818 low as marked by the 5 blue numbers.

6. If the movement of several years ago is occurring, the sideways affair from the July high to the 829 low shown in the light blue horizontal box as marked by the red labels is probably how the market is unfolding / has unfolded.

7. We can see how the low on 829 was not supported by such momentum oscillators as RSI and Slow Stochastics as is marked in the CHART by the short horizontal line in the bottom box (see pages 171-84 of "The $upertrader's Reference Manual").

8. CHART #625 shows another update of the continuous spot futures contract for the same market.

9. We can see how the 829 low has occurred on time in accordance with the blue and green boxes in the lower right corner.

10. The red arrows suggest that the information on page 376 of "The 2006 $upertrader's Almanac - 2nd Half Edition" have aligned with the boxes and have set a low.

11. This interpretation supports the belief that this market is experiencing something along the lines of the movement of several years ago shown by the light blue boxes.

12. If such is the case, the boxes in the upper right corner suggest that price should move higher over the next several days and that the upleg, should it occur, should be similar to that of the June low to July high.

13. If the 829 low is taken out, the very bearish assumption presented by the red lettering in the following CHART will be assumed to be in play:

UPDATED 20060905

COMMENT #313

CHART #s 626-627

1. The following CHART shows the record high of a couple of years ago.

2. As can be seen, price had declined for about four months and was believed to have been at an important low.

3. The decline did stop as expected, but the ensuing rally was tepid and, a couple of months later, it was time for the market to set another important low as can be seen in the following CHART of daily prices for the continuous spot futures chart:

4. From the low, a short, stout rally did ensue as price moved up from the green MLC (Monthly Linear Time Cycle Index projected low) to the blue WIC (Weekly Inversion Cycle Index projected turn) and red MLC (Monthly Linear Time Cycle Index projected high).

5. However, sharp as the rally was, when placed in perspective versus the record high, the move was not massive as can be seen in the following CHART:

6. The market wound up experiencing a summer high and became in position for an extended decline that was best seen at the time in the complex in the following CHART of daily prices for the November contract:

7. Several weeks later saw the market in position to set an important low as seen by the following CHART of daily prices for the December contract.

8. How the complex was bottoming was seen at the time here:

9. From the September low, price rallied for the next month where the next turn was set followed by another leg down as seen in the following CHART which best exemplified the position of the complex at the time and which market was believed to be in the strongest relative position:

10. Another nice sharp rally followed over the next couple of months to the high of last December as can be seen here:

11. Two months later, however, saw price retracing the long term green up trendline shown in the CHART above.

12. A few days later, the July contract was believed to be setting the blue Wave 1 advance / Wave 2 decline shown in this CHART (see pages 283-92 of "The $upertrader's Reference Manual").

13. This prompted the following POST to be issued for participants in the October-March edition of "The 2005 $upertrader's Book of Linear Time Cycles".

14. Here we can see price moving down from the blue MIC projected turn to the green MLC projected low.

15. But price just had to break that green horizontal trendline shown in the next CHART which set up the next bottoming opportunity.

16. A bit later, though price had bottomed and begun its expected advance, the following CHART showed how intensely large commercial interests were supporting the market and price lows.

17. A couple of months later, price had moved up from the two blue WIC projected turns shown in the above CHART and up to the next blue WIC projected turn.

18. The market appeared to have completed the blue A-B-C corrective movement shown in the December contract.

19. With that background, we can now review today's CHART #627 which continues from the June high at the blue WIC box.

20. As can be seen, price continued the decline and appears to have unfolded in the red A-B-C movement marked in the CHART by the red letters.

21. The numbers in the two red boxes show that the A and C legs are about equal in price.

22. The movement from the December high shown in the upper left corner has, to the low shown in the lower right corner, required 237 calendar days (FIBONACCI #=233).

23. 56 calendar days in the red Wave B advance (FIBONACCI #=55).

24. At the bottom of the CHART, we can see how price has responded previously this year when the commercial net long position has been at the levels it is now as seen by the three green circles / ellipses.

25. A little longer perspective of how important these levels appear to be is shown in the following CHART:

26. Today's CHART #627 shows that the market appears to be attempting to set a reverse head-and-shoulders chart bottom as marked in the CHART by the three green cups.

27. Though not marked in the CHART, there are 7 trading days on each side of the "head".

28. So long as the August low holds, the assumption is that the market is attempting to set as important low in accordance with the green MLC projected low marked in the CHART by the green MLC box and by the two blue WIC projected turns marked in the CHART by the blue boxes.

29. The steep green down trendline is about Friday's high.

30. If broken, without price taking out the August low, the assumption will be that the market has turned in accordance with the blue and green boxes.

31. A new low will cause reassessment with respect to short term considerations such as entry points and so on but is not expected to change the expectation of an important bottom being at hand.

32. The next CHART, #628, shows weekly prices for the continuous spot futures price.

33. Here we see that the low in this market was set at the left shoulder of the December contract as marked in the CHART by the pink horizontal trendline.

34. We can see that price has held above the thick green horizontal trendline of a couple of years ago.

35. The green circles in the bottom box, again, emphasize the importance of the net long commercial position at this low as at the prior low circled in the CHART.

36. The CHART shows that the initial low at the end of 2004 was set 18 weeks after the high followed by another 91 weeks to the August low this year, 109 total (FIBONACCI #=89 & 2 X FIBONACCI #55=110).

37. 91/18=5.056 (FIBONACCI #=5).

38. From the 2005 high, the CHART shows that the market appears to have unfolded in a 15-35-9=59 week decline (FIBONACCI #s=8, 13, 34 & 55).

39. The problem with this interpretation is that the decline from the high of late last year was seen in the daily CHART of December prices as having unfolded in a red A-B-C affair.

40. What this all suggests is that the advance expected is likely to be a 5 wave impulsive affair but that it is also likely to be part of a much more complex movement that will eventually require more time to resolve itself.