Government never furthered any enterprise
but by the alacrity with which
it got out of its way.

--Henry David Thoreau

UPDATED 20060919

COMMENT #351

CHART #685

1. A few days ago, we were discussing how the red and blue boxes were signaling a false breakout in the following market and how the false breakout was occurring throughout the complex.

2. Today's CHART #685 updates daily prices and continues the discussion of yesterday where we were investigating the significance of the green ascending channel shown and whatever price support might be seen at that channel.

3. At the top of the CHART, the small red WLC (Weekly Linear Time Cycle Index projected high) has been moved a bit to the left as marked by the red arrow.

4. The blue WIC box has been moved below price as a result of the sharp decline.

5. We can see both the head-and-shoulders top formation and reverse head-and-shoulders bottom formation (although not marked in the CHART) that were discussed yesterday.

6. The significance of this CHART is that, if the blue box is to be moved from above price (signaling a high) to below price (signaling a low), a "bounce/correction" would not be surprising.

7. Since the large red box in the upper right corner is of monthly significance, and the green/blue combination in the lower right corner is of weekly significance, the ideal world would not see the 906 high not broken on any correction attempt.

8. In other words, whatever correction (if it does occur) would not exceed the 906 high.

9. At this time, the most significant feature of the CHART remains the blue MIC box at the March low, red MLC projected high box in May, green MLC box offset 1 month in July, and red MLC projected high in September.

10. The black box remains and identifies the nuances of the head-and-shoulders top formation.

11. This CHART was important to the complex as it identified the May high and set the "head" high that month.

12. The longer term expectation thus remains for lower prices.

UPDATED 20060919

COMMENT #352

CHART #686

1. CHART #686 shows daily prices for the continuous spot futures contract.

2. Three days are identified where price attempted to re-establish the uptrend.

3. This is the reverse of the "slam" situation shown a few days ago here:

4. As a result of the price action shown, yesterday's gap down and intraday low are in place to become of significance to this market.

5. Should the market be able to take out the low without closing the gap, the price action will appear on the charts as a breakaway gap, an attempt to fill the gap, and downside trend acceleration a price returns to and moves through the horizontal pink line.

6. At the bottom of the CHART, we can see that the net commercial position has moved to its lowest (most bearish) level during the period shown.

7. It would seem that commercials are of the opinion that this market will move lower.

8. Such belief is consistent with the red and blue boxes shown in the upper right corner of the CHART.

UPDATED 20060919

COMMENT #353

CHART #687

1. A bit ago, the following CHARTS suggested that a bottom was at hand in the following market and complex:

2. We still had a few more days to navigate, however, regarding that second blue box shown in the lower right corner.

3. Today's CHART #687 of daily prices for the December contract updates.

4. The essence of the action shown is that the red A-B-C movement, if correct, suggests the end of the current decline (see pages 283-92 of "The $upertrader's Reference Manual").

5. We can see that price has encountered resistance at the grey horizontal box representing the down gap early last month.

6. The most bullish event that can occur would be a gap up above the grey box in the next few days that leaves a month or so island below the gap.

7. At the bottom of the CHART, we can see that commercials continue to support the expectation of higher prices.

UPDATED 20060919

COMMENT #354

CHART #s 688-689

1. A bit ago, the following CHART of daily prices for the continuous spot futures contract was shown which suggested a bottom.

2. Today's CHART #688 updates and shows that price did bottom on time.

3. CHART #689 shows daily prices for the December contract.

4. We can see how December has broken the pink horizontal dashed line while the continuous spot futures contract has not, thus forming an intramarket price divergence (see pages 171-84 of "The $upertrader's Reference Manual").

5. At the bottom of the CHART, we can again see that commercial interests are supporting this market.

6. The black horizontal dashed line shows how the net position is actually now larger than it was at the June bottom from which a nice short rally ensued.

7. When we inspect the price action of the last few days since the bottom shown, we can see that this market is set up for long side entry today via the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual".

UPDATED 20060919

COMMENT #355

CHART #690

1. CHART #690 shows daily prices for a cash index.

2. Again, this is the unfavored bearish position.

3. Price did not break Friday's high yesterday and spent the rest of the day selling off.

4. If this market is to break down, it will likely be because the interpretation shown is correct.

5. Here we see a 5 wave impulsive decline to the August low and then the blue a-b-c corrective advance to Friday's high thus forming the blue Wave 1-2 sequence at the .618 price retracement level marked in the CHART by the red horizontal dotted line.

6. This is not believed to be what is happening in this market and the complex.

7. Instead, the market is believed to be in the bullish position discussed over the last few weeks.

8. Nevertheless, we don't want to overlook the importance of the market's ability to convincingly take out the .618 price retracement level and that pink horizontal line shown.