Don't judge folks by their relatives.

UPDATED 20060921

COMMENT #356

CHART #356

LTC0601 - #9

1. The following CHART of daily prices for the cash Dow Jones Industrial Average was presented with the April - October edition of "The 2006 $upertrader's Book of Linear Time Cycles" (1st half edition or LTC0601).

2. The CHART included the cycle projections for three sets of data:

D1 studied prices from the beginning of the last century and included the post-Federal Reserve period.

DI studied prices from the post-Bretton Woods agreement.

DJ studied the continuous spot futures contract of the last decade or so.

3. The shortest projections of the futures contract are nearest price and the longest are furthest away.

4. The red boxes above price show Linear Time Cycle Index projected highs.

5. The large red boxes are monthly projections (MLC) while the small red boxes are weekly (WLC).

6. The green boxes below price are projected monthly and weekly low projections (MLC & WLC).

7. The blue boxes are the Inversion Cycle Index projected turns.

8. When using cycle projections, we must assess the actual movement of the market with respect to the projections.

9. At the time of the above CHART, price had moved up from the green and blue projections in the lower left corner of the CHART to the blue and red projections in March and was thereafter moving down into the green projections at the time of the release in mid-April.

10. CHART #2 was then released about a month later.

11. We can see at the green up arrow how price bottomed at the time of the release and green MLC projected low and thereafter rallied sharply into the high of the year.

12. The CHART was released right as the high occurred in the midst of the red and blue WLC projected high and WIC projected turn shown.

13. The red circled green WLC box at the bottom of the CHART was also discussed at the time.

14. The point of the discussion was how that green projected low was disregarded since the actual action of the market was not down into the green projection, but was up into the more important red and blue boxes at the red down arrow in March.

15. The light blue and green shading was added to better demonstrate visually how these alignments work as time goes by.

16. From the May high, a sharp decline ensued as price moved down into the June lows.

17. These lows were best explained at the time in the following CHART #417 of daily prices for the continuous spot futures contract for the NASDAQ 100.

18. We can see how price had moved down from the red and blue boxes at the top of the CHART to the green and blue boxes in the lower right corner.

19. The above CHART was posted as part of the CHART service at the time as prices in the complex bottomed.

20. The following update #419 of daily Dow Jones Industrial Average prices was then posted the next day which showed how the June bottom also aligned with the green WLC boxes below price.

21. A couple of weeks later, price had rallied up to the high shown in the next CHART posted for the LTC0601 which was #6.

22. Where the blue MIC projected turn had previously been presented as light blue and both above and below price, by early July, because of the rally in price, the monthly projected turn was believed to be setting an important high in price.

23. The color was thus changed in the box above price to dark blue.

24. Since the high was of monthly significance, a "ringed high" was expected to form (see "The $upertrader's Reference Manual").

25. Ringed highs are highs that are higher than the preceding and following month and should be easily identified on a future monthly chart.

26. As can be seen, a problem with this projection forming a high was that the early July high shown was not above the June high.

27. Nevertheless, from a cyclic perspective, this was the hand that was being dealt at the time.

28. CHART #7 showed how the June high was exceeded in the continuous spot futures price thus diverging with the cash index.

29. From the early July high, price again dropped sharply into the mid-July low.

30. The low was, again, best explained by the following CHART #490 posted for CHART service subscribers in mid-July.

31. Again, the low, as can be seen in the CHART, was made amidst the blue WIC projected turn.

32. The projected turn and blue boxes were placed below price because the market had moved down into the projected turn from the red box projected high marked in the CHART by the red box above price in early July.

33. From the July low, the market rallied into early August and the following CHART #8 was released for Linear Time Cycle Index purchasers.

34. A top did form Friday of that week, but it formed above the July high and has been exceeded since.

35. Today's CHART #9 updates.

36. The high above the July high and subsequent advance has caused reassessment.

37. The most important reassessment is the movement of the blue MIC box from above to below price in July.

38. The more important information is the red MLC projected high for the long term D1 and intermediate term DI studies for the month of September.

39. These projected highs are marked in the CHART by the red MLC box in the upper right corner.

40. As can be seen, the ideal high would have been in the blue WIC box.

41. However, yesterday's new intraday high has exceeded the high of last Friday as can be seen in the CHART.

42. The most important event influencing price right now seems to be the decline in the price of oil.

43. In the CHART service, short positions were initiated in mid-July as crude oil prices topped.

44. The short positions were then re-affirmed across the energy complex as the false-flag British Petroleum "rusted pipeline" story broke Sunday, 806.

45. By Monday morning, the damage projected on the news reports anticipated a $10 further rise in crude oil prices.

46. The cycle projections were extremely important to the tops in this complex.

47. The CHARTS of how the top was handled have been put together in a .pdf file and provide insightful study for cycle users.

48. The CHARTS are attached for paid-up subscribers.

49. If needing to bring your account current, we do accept Amex, but not Visa / MC.

50. Finally, to read the commentary accompanying each CHART, go to the site at http://www.supertraderalmanac.com/trade_of_the_week.htm and click on the date of the COMMENT # which is the first of the two numbers in the first line of each CHART.

UPDATED 20060921

COMMENT #357

CHART #692

1. A few days ago, we noted the divergence that was occurring between the continuous spot futures contract and the cash index as shown in the following two CHARTS:

2. We can see how this divergence was just the opposite of what had happened at the July low (see pages 171-84 of "The $upertrader's Reference Manual").

3. Today's CHART #692 of daily prices for the cash index updates.

4. Yesterday's price action has necessitated reassessment.

5. We can see how price has retraced about .618 of the decline shown.

6. The three yellow boxes identify three "clusters" of Astro turning point projections from page 376 of "The 2006 $upertrader's Almanac - 2nd Half Edition".

7. The third set on the right is especially of interest as it includes the events identified by the two black up and down arrows.

8. We can see how price continues to move up from the green WLC box in the lower right corner to the red and blue boxes in the upper right corner as was previously discussed.

9. From the blue Wave 1 low shown, the reassessment caused by yesterday's price action now interprets the price action since as the blue A-B-C advance (see pages 283-92 of "The $upertrader's Reference Manual").

10. The red dots are possibly extending the ascending diagonal triangle marked in the box by the two green thick trendlines.

11. The text in the black box shows how the blue Wave 1-2 sequence and the blue A-B-C sequence are all in PHI proportions.

12. Yesterday's high was just a tad above the point where blue Wave C = blue Wave A from a price perspective.

13. If the red boxes are properly placed (from the black Wave 4 low), the market, presumably, is in place to experience what has become an elusive top with the down red arrows in the yellow box being of especial importance.

14. At the bottom, we can see how such momentum oscillators as RSI and Slow Stochastics continue to diverge with price, thereby forming an important price / momentum oscillator divergence.

UPDATED 20060921

COMMENT #358

CHART #693

1. CHART #693 shows daily prices.

2. The cash index is in the upper left corner, the continuous spot futures contract in the upper right corner.

3. The December day session and overnight session futures contracts are in the bottom row.

4. As can be seen, the upper row markets have made new intraday highs.

5. However, as can be seen, the December futures contracts are failing to confirm the new high, thereby forming intramarket price divergence (see pages 171-84 of "The $upertrader's Reference Manual").

6. It should be also noted that the markets in the upper row are also diverging with the market in the previous COMMENT, thereby forming an important intermarket divergence.

UPDATED 20060921

COMMENT #359

CHART #694

(Posted mid-morning Thursday 921)

1. CHART #694 shows hourly prices for the cash index.

2. The low in the lower left corner occurred on 810 and is the blue Wave B low from the following CHART:

3. What is expected from this low is a 5 wave impulsive sequence.

4. The interpretation shown in the hourly CHART is different that that of the daily CHART.

5. The difference is that the ascending diagonal triangle starts at the black Wave 4 low in the hourly CHART but at the blue Wave 2 low in the daily CHART.

6. This CHART also shows an ascending diagonal triangle marked by the two ascending black trendlines.

7. The triangle is marked by the 5 blue numbers and, under this interpretation, has either completed, or is about to complete, the entirety of the black 5 wave impulsive sequence (see pages 283-92 of "The $upertrader's Reference Manual").

8. The red lines in the top and bottom charts show that such momentum oscillators as RSI and Slow Stochastics are failing to confirm the new highs, thereby forming important price / momentum oscillator divergences (see pages 171-84 of "The $upertrader's Reference Manual").

9. If the pattern is correctly interpreted, this is a very bearish formation.

10. Let's take a look and see if the movement is tightly bound (the following is through the blue Wave 5 high shown in the CHART):

11. The sequence shown in the CHART unfolded over 4-6-28-34=72 hours (1/2 FIBONACCI #144=72) through the black Wave 4 low.

12. From that low, the ascending diagonal triangle has occurred over 42-27-37-6-6=118 hours with 85 up and 33 down (FIBONACCI #s=34 & 89).

13. Up / down = 2.576 (SQ PHI = 2.618).

14. Total / up = 1.388 (1.000 + SQ [1/PHI] = 1.382).

15. Total / down =3.576 (1.000 + SQ PHI = 3.618).

16. Blue W1 = 42 ~ W3 + W5 = 43.

17. The entire movement occurred over 4-6-28-34-118 = 190 hours.

18. Total / blue diagonal triangle = 190 / 118 = 1.610 (PHI = 1.618).

19. Total / 1st 4 black waves = 190 / 72 = 2.639 (SQ PHI = 2.618).

20. Blue diagonal triangle / 1st 4 black waves = 118 / 72 = 1.639 (PHI = 1.618).

21. In the entire 190 hour advance, there are 150 up and 40 down hours.

22. Total / up = 190 / 150 = 1.267 (SQ RT PHI = 1.272).

23. Let's look at the movement from a price perspective.

24. The entire move covered 62.53 points (100 X 1 / PHI = 61.80).

25. Total / W1 = 4.400 (CUBE PHI = 4.236).

26. Total / W3 = 1.669 (PHI = 1.618).

27. Total / W5 = 1.418 (SQ RT 2 = 1.414).

28. W3 / W1 = 2.636 (SQ PHI = 2.618).

29. W5 / W3 = 1.177 (SQ RT 1.382 = 1.176).

30. W5 / W1 = 3.103 (3.000).

31. Now let's look at the 5 blue waves.

32. Blue Waves 1 & 3 are about equal at 32.86 and 32.71 points.

33. W1 / W5 = 1.493 (1.500).

34. Total / W3 = 1.348 (1.382).

35. Total / W5 = 2.003 (2.000).

36. These results thus confirm the expectation of a pending, or completed, market top.