SEPTEMBER COMMENTS
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Comment numbers for 20060906 314
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".
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CURRENT COMMENTS
The best thing about the future is that it only comes one day at a time. UPDATED 20060906
COMMENT #314
CHART #s 629-632
(Post-close COMMENT with prices through Wednesday's close, 906)
1. CHART #629 shows daily prices for the cash index.
2. The light blue box in the upper right shows that the decline to the low shown lasted 89 calendar days (FIBONACCI #=89) followed by a 49 calendar day rally.
3. The blue arrows drawn to the right from the July low show that the distance to this week's high (not the vertical red line) is 34 trading days (FIBONACCI #=34) and from the August low is 17 (1/2 FIBONACCI #34 = 17).
4. The high of the year on 420 is shown in the upper left corner.
5. The 407 date of 13 calendar days earlier (FIBONACCI #=13) is but a fraction of a point lower (see the horizontal pink line).
6. From this 407 earlier high, the blue arrow directly below shows that the distance to the July low is 69 trading days (2 X FIBONACCI #34 = 68) or about twice that of the distance to this week's high and about 4 times the distance from the August low.
7. The July / September rally is thus about 50 percent of the distance of the April / July decline.
8. The red dotted horizontal line shows that price has retraced about 50 percent of the decline to the September high.
9. In other words, a 50 percent time and price correction thus squaring both.
10. The green lines in the middle chart show that such momentum oscillators as RSI and Slow Stochastics are not diverging with price at this week's high, however (see pages 171-84 of "The $upertrader's Reference Manual").
11. The real story, however, is seen by the volume pickup in the bottom box as price has moved through the lower ascending diagonal red trendline.
12. Such action is what one expects to see on trend reassertion.
13. It would be nice to see the pattern confirm the above.
14. So, from the 420 high, the decline is interpreted as having unfolded in the 5 blue numbered impulsive sequence (see pages 283-92 of "The $upertrader's Reference Manual").
15. The blue Wave 3 decline is interpreted as having experienced the 5 wave impulsive sequence marked by the 5 black numbers.
16. This leaves the blue Wave 5 downleg at about .618 X the blue Wave 3 decline in terms of price.
17. The blue Wave 3 portion of the decline is about .786 X the entire April / July downmove.
18. From the July low, the most logical explanation of the price action to this week's high is seen by the red A-B-C movement shown.
19. Here A+B = 17 trading days = C (1/2 FIBONACCI #34 = 17).
20. The 5 blue impulsive waves in the decline and 3 red corrective waves in the advance / correction suggest the blue Wave I - II sequence shown in the CHART is now complete.
21. As a result of this interpretation, the break of the pink horizontal line at the blue Wave 4 high of early July is of no consequence since the corrective advance from the July low was correcting the entirety of the April / July decline.
22. CHART #630 also shows daily prices for the cash index.
23. Again, the main event is the volume pickup shown in the bottom chart.
24. The red dotted line shows that this volume pickup was the highest of the last couple of weeks.
25. The red horizontal dotted line in the upper chart shows that price has retraced about .786 of the May / July decline (1 / SQ PHI = .786).
26. Here we can see that price has not quite broken the lower red ascending diagonal triangle trendline shown, but is close.
27. Since the decline to the June low was believed to have occurred in a 5 wave impulsive sequence as was shown here, the market is believed to have unfolded in the blue Wave I - II sequence shown (see pages 283-92 of "The $upertrader's Reference Manual").
28. CHART #631 shows daily prices for the continuous spot futures contract and updates the distances marked by the blue vertical lines at the top of the CHART.
29. CHART #632 shows hourly prices.
30. What is believed to be the end of the advance shown occurred the third hour of 905 instead of the first.
31. This final high completed the 5 blue boxes shown which ended the black Wave 5 advance which, in fractal manner, ended the blue Wave 5 advance.
32. The blue box shows that just as the blue Wave 5 was .786 X blue Wave 3, so was black Wave 5 .786 X black Wave 3.
33. The important element in the CHART is seen by the red numbers after the high.
34. Here we see the market as appearing to unfold in an impulsive decline, the first sign of trend reassertion to the downside.
35. The bomb bay doors are open.
36. The target's below.
37. Bombs away !!!
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!
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