"In questions of power ... let no more be heard of confidence in man,
but bind him down from mischief by the chains of the Constitution."

--Thomas Jefferson, Kentucky Resolutions, 1798

UPDATED 20060925

COMMENT #361

CHART #696-698

1. We took a look at the negative alternative outlook for this market a bit ago in the following CHART of daily prices for the continuous spot futures contract:

2. The high at the red Wave 2 high shown in the above CHART was the result of expectation of the 5th blue dot/box in the sequence shown here:

3. The second CHART of daily prices for the continuous spot futures contract showed the bullish interpretation (see pages 283-92 of "The $upertrader's Reference Manual").

4. The bullish interpretation was shown in the cash index here:

5. The CHART above shows the "cluster" of Astro Point projected turns in the upper left and lower right corners in the yellow highlighted boxes.

6. The completion of the advance and bearish alternative interpretation was shown here:

7. Today's CHART #696 updates daily prices for the December futures contract.

8. Again, the favored bullish interpretation is shown.

9. This bullish interpretation is part of the much larger perspective shown in the following CHART of daily prices for the cash index here:

10. It is also part of the still larger bullish perspective shown in the following CHARTS of weekly and monthly prices here:

11. CHART #696 assumes that the sharp, panic decline of the last week or so is a normal a-b-c corrective movement to a Wave 2 low as shown by the black lettering in the CHART.

12. If correct, price will hold above the pink horizontal trendline drawn from the 831 low.

13. The green ascending trendlines show that Friday's low occurred right at the up channel marked by the lines.

14. The green horizontal dotted line show that this black Wave 2 low was set at around the .786 price retracement level from the blue Wave 2 low.

15. The assumption is that, from the 808 low, the market has formed a blue and black Wave 1-2 series as shown.

16. CHART #697 shows daily prices for the cash index.

17. Here we see the next "cluster" of points listed on page 376 of "The 2006 $upertrader's Almanac - 2nd Half Edition."

18. Friday's low is consistent with these points.

19. We can see how price continues to hold above the green thick up trendline drawn from the 2004 low even though the small short thin green up trendline shown in the CHART has been broken.

20. Although price is above the blue ascending pitchfork, the rates of the 821 low and Friday's low have been set at about the same rate of advance as the blue pitchfork, thus providing price support.

21. Price is continuing to trade above the red upper descending pitchfork line, thus providing further support.

22. From the black Wave 2 low on 831, Friday's low occurred 22 calendar day's later (FIBONACCI #=21).

23. From the 605 low, the blue Wave 1-2 sequence lasted 60 calendar days with another 49 to Friday's low and completion of the blue and black Wave 1-2-1-2 sequence from the 804 low to Friday's low, 109 total (2 X FIBONACCI #55 = 110).

24. 60 / 49 = 1.224 (SQ RT PHI = 1.272).

25. If correct, the complex should be in place to finally move in accordance with the bullish interpretation discussed above.

26. For example, the following CHART shows how the market was believed to be setting an important black Wave 2 high in the following CHART of continuous spot futures prices:

27. Today's CHART #698 updates.

28. The movement is assumed to be the blue Wave 1-2 sequence shown.

29. This interpretation is consistent with that discussed previously in this COMMENT.

30. We can see by the red lines at the top of the CHART that the black and blue Wave 1-2 sequences have lasted 54 & 23 trading days (FIBONACCI #s = 55 & 21) and 87 and 32 calendar days (FIBONACCI #s = 89 & 34) thus suggesting that these two sequences are in approximate PHI proportions.

UPDATED 20060925

COMMENT #362

CHART #699

1. The following CHART showed, in the upper left corner, how the December contract was forming an important head-and-shoulders top and that the implication was that the rest of the complex was in weak hands.

2. The December interpretation was consistent with the series of lower highs marked by the red caps in the following CHART of daily prices for the continuous spot futures contract:

3. Today's CHART #699 shows hourly prices for the December contract:

4. The right shoulder high of earlier this month shown above in the daily CHART is the high in the upper left corner of today's hourly CHART.

5. The two blue boxes identify the two Astro events shown.

6. From the high, the market appears to have declined / advanced to the red Wave 1 low / red Wave 2 high.

7. The advance to the red Wave 2 high occurred in a 6-6-10=22 hour sequence as marked by the red Wave A-B-C movement shown (FIBONACCI #=21).

8. 16 up and 6 hours down placing the corrective red Wave 2 advance in PHI proportions.

9. The blue numbers show that the decline unfolded in the blue 5 Wave impulsive decline shown (see pages 283-92 of "The $upertrader's Reference Manual").

10. The red text in the upper right corner shows that this decline / advance occurred over 36-22=58 hours total (FIBONACCI #s = 21, 34 & 58) and that the legs are in PHI proportions.

11. From a price perspective, we can see that Friday's high retraced about 50 percent of the red Wave 1 decline and that price moved back up into the light grey horizontal shaded box shown.

12. The short pink horizontal line to the right shows that this market is set up to provide short side entry via the trading technique presented on pages 205-9 of "The $upertrader's Reference Manual").

13. Combining the outlook of the daily CHARTS discussed above, the action since, and the present position of the market suggests that this contract is in very weak position.

14. The rest of the complex similarly seems to have just completed a-b-c corrections over the last few days.

15. If this complex is in weak hands, such structure would be consisted with the bullish interpretation discussed in the prior COMMENT.