Commodities: The Next Level

Commodities: The Next Level

If your experiences with Commodities Markets have generally been unsuccessful, this Website can assist you. You may have to abandon previously held perceptions and possibly save your ego for those areas of life at which you are truly expert.

A situation we will call the “Big Picture” has developed in Commodities Markets over at least a 35 year period that will result in pushing these markets to stratospheric highs, multiple times over the next 15 years. The first “big moves” are staging now. The money to be made in these Commodities Markets is simply unlimited. What I uncovered in November / December 2004 had me pacing the floors wondering if what I was seeing could possibly be true. The scope and magnitude was just too great! It literally took a few days to take it all in. What I am going to tell you CAN’T NOT happen. To simply say it will happen does not give enough emphasis or impact and the significance is limited somehow, so I will say it again, what we are going to cover and what I am going to tell you CAN’T NOT happen. The stage has been set; there is NOTHING that can or will stop what has already been set in motion.

Throughout this Web Site we will be talking about Commodities Markets from a “technical” standpoint. Commodity charts, chart action and resulting formations that have and are occurring. “Fundamentals” do not drive Markets. “Fundamentals” can and sometimes do alter short term pictures or chart action of a particular Commodities Market though they have never and will never alter the bigger picture. We will go into “fundamentals and Market manipulation” in more detail later.

Most long term (monthly) commodities charts take us back as far as 1959 and no further. I have provided examples on this Site. Commodities Markets have been in existence here in the United States since 1848. “Technicians” or people utilizing chart action to assist their trading have been around as long as “quotes” were made available in daily news papers. My perspective on Commodities Markets and my understanding of commodity charts come solely from Ted Warren and my experience. Ted is the only “documented” person I know of to write in detail about charting, and through his experiences with charts and Commodity Markets he developed a perspective that many dispute or are afraid to acknowledge because the implications are simply “out of line” with conventional wisdom or thinking. He would have made a great detective as he may have been the first to put all the pieces of this particular puzzle together. His detective work took him away from the smaller picture and allowed him the ability to understand how a “major or big” move takes place. He came to understand the “Big Picture”.

Before we go any further and to put things into a tangible perspective, let’s cover some perceptions that traders tend to “cling” to in their desire for success.

Commodities Markets are a gambler’s quiet and often secret paradise. There is possibly a 5 % bracket of commodity traders who can honestly say they make more money than they lose. If anything, this bracket is smaller. So why does it seem to be common knowledge concerning Commodities Markets that 80 % is one key number and 20 % the other? If asked, most people will say that to their understanding only about 20 % of participants make money in Commodities Markets. If you look around or maybe you’ve noticed, there are at least a dozen “systems” that lay claim to having a success rate of “almost”, “practically” and “nearly” 80 % if one was to apply their “system’s” principals. 80 % appears to be the desired “selling” number that attracts commodity traders. I suppose it’s plausible therefore, believable. A one in five chance is also just the right odds for attracting gamblers.

Perceptions are generally clouded in falsehoods. Those with enough wisdom or experience know this, yet it is still easy to fall into generalities with issues, subjects and situations we are not intimate with. Take for example the Stock Markets, the perception here is to wait, be patient, you are in for the long haul, stay the course. The Commodities Markets are just the opposite, quick and much is the name of this game, right? Where do these perceptions come from? Perceptions can sometimes be nothing more than propaganda intended to assist an agenda.

The average trader (95 %) tends to be led to a collective area. This collective area is cyclical in nature and involves quick trades, systems making false claims, invalid advise, “rebounding” after a losing trade, day trading, and much more, all of which lead to gambling. Many traders don’t even know this is happening and for many the realization comes late.

The game that is taught to all within the Commodities environment including Commodity Brokers, contains and limits you to the maximum extent by keeping you focused on the “Small Picture” and short term possibilities within Commodity Markets. The true game and its intent are kept hidden even to those considering themselves close to the Markets, knowledgeable or “insiders”.

Perceptions that perpetuate this situation are of course deliberate.

The following applies to any and all Markets with a traceable history including Stock Markets. The reason to cover this is not necessarily to teach but to familiarize you with certain terms, if you are not already. I will not go into who the whos are as I don’t know and don’t care. This is simply a game devised very niftily at first and then over time threaded into the fabric of society so thoroughly and completely as to encompass and embody the very nature of our society as a whole. How could Commodity Markets possibly be a lie? They stand for our very way of life, “Free Markets, Supply and Demand, Capitalism,” maybe, maybe not.

Let’s use Commodity Chart # 11 on the Reference page for our example. This is a Weekly Chart of the Silver Market on high density from April 2001 through May 2007.

This Commodity Chart of the Silver Market for the given time period contains everything we need to discuss that occurs during a “Big Move”, even though Silver is hardly finished.

There are 4 phases to a substantial Market move: Accumulation, Consolidations (as there is normally more than one), Topping and Distribution.

Accumulation: occurs at low pricing levels, is very “quiet” ..i.e.… no volatility, follows a distribution phase, the length of time for this phase can be a handful of months and up to or even longer than 12 months. The majority of Ted’s trading was during “Level One”, before the early to mid 1970’s. These “Levels” will be covered shortly and as I will point out, these Accumulation Phases take on a whole new meaning. However and in short, it is the “build up” phase. This phase of the “move” we are at the gas station receiving fuel for the move to come.

Consolidation: occurs after the accumulation phase is finished and a rise or ascending trend has developed as can be seen here starting in May of 2003. The basic gist of the consolidation phase is to get you to take your ball and go home, exit the Commodity Market and of course, leave your money on the table. As we will go into, patience is probably the biggest factor in success on a grand scale in these Commodity Markets, second to understanding what is really happening when you examine a set of charts.

As we go along, you need to understand this: I was taught, I learned and I came to understand the Markets and charts from Ted’s perspective and more to the point, Ted talked of Markets and chart action including these Phases as they related to his “day” or “Level One”, this was my mindset, for that matter little did I realize I was trading the tail end of “Level Two” at the time. For example, the above stated time period for the Accumulation Phase was basically Ted’s words and time frame he knew to be true during and throughout “Level One”, however it can still hold water. Ted’s writing was done and published in the mid 1960’s. After he saw his book shut down, he gave seminars on the Commodities Markets during the 1970’s a few years before his death.

Consolidation Phases in Ted’s day were more often than not 6 week formations. As you can see on the Silver chart, this Consolidation Phase was about 18 months. The scale and magnitude of commodity chart formations have gotten so big that very few people have noticed and is why I said in paragraph one, when I did see what I saw not only was I pacing the floors, I think I fell out!

Let’s take another example, Coffee. Unfortunately I did not include this chart as I am editing some of the original. On my Broker’s site, I’ve pulled up a Monthly Coffee commodity chart on medium density. This takes me back to 1996. You only need to go back to 1999 to see what I am going to point out, so if you do not have a good chart site, go to your search engine, type in www.bohl.minot.com and go to “Weekly”, find Coffee, hit it and you get a beautiful Coffee chart. This chart gives you basically the same time frame but is a Weekly instead of a Monthly and for our purposes is not a big deal and actually the weekly gives you a better picture, (more detail).

That “move” in 1997 was huge money. All of the down time into July 1999 was Distribution. After this started the Accumulation phase, notice the “tick” marks getting smaller, more “quiet”. This Accumulation Phase lasts until July 2004. That’s 5 years of Accumulation! For the past 2 plus years, there has been a Consolidation (re-write August 5, 2007) and yes Coffee is set to go HUGE.

So this gives you a great example of the Distribution aftermath. This is not a good example of Distribution because we would need to go to a daily chart to see everything, but is a great example of Accumulation rising up into a Consolidation.

Often times a Consolidation will take the form of a triangle. Coffee is not perfect, but is good. Silver on the other hand could not be better! Traders that are “funneled” into the “quick and much” mindset would never think to look at a weekly or a monthly chart for tradable formations, their focus is on the dailies. This is what happened to me in late 2004 when I was just “diddling” around, then I keeled over and hit the floor.

Consolidations are the best platforms to trade from because they are finite and can be “timed’, with patience, closely. A Consolidation can be as simple as 4 - 6 days of stalling, where prices stay put. This is how impatient traders generally are, prices stall and they’re out of there! Ted called this “discouraging action”, aptly named because that is exactly what it does to the commodity trader.

From the very top of the Silver chart in March / April 2006 to May 2007 I consider “Topping” action. I’m convinced in time (3 - 6 years) Silver will surpass its old high reached in 1980, so in affect this really is another consolidation area, but it will also be a “Topping” phase as well. To describe this fully and with all detail would make for another chapter, so let’s go with my premise: Gold and Silver, have a hard time going with or in the same direction as the U. S. Dollar and the Stock Market. The Stock Market IS going to go big, it’s a forgone conclusion and not even debatable, and with it the Dollar will be dragged back north from its current level of .80 and change to about the .90 cent level. I don’t see Gold or Silver or any other Metals (except possibly Palladium), moving higher until the Stock Market has “Topped” at least once.

With that said we will call this last 12 / 14 months in Silver Distribution. Notice the huge, jagged volatility going on here. It would be very typical to see a sharp down turn here from this type of chart formation. Many times as Ted knew and describes, a typical “top” will have a second “top” surpassing the first, so this example may not be “typical”, however I still believe it to be a “top” at least in the short term.

Distribution comes after the “Topping” action. A steady trend downward will develop often sharply. I’ll just quote loosely from Ted here, “this is where all the “boys” bail, selling everything, take profits and the little guy is left holding the bag.”

As part of the game and intended, the general trading public normally becomes interested in a Market only once it starts making headline news, then they buy. By God, if you ever find yourself in a particular Commodity Market (besides Crude Oil, because Crude is talked about daily) and you hear CNBC, Bloomberg or any other news outlet talking about how high your Commodity is going and you do not know how to interpret a chart correctly, grab the nearest phone, get your broker on the horn and SELL as quickly as you can!! That is YOUR signal.

The "Big Picture"

Commodities prices are set to skyrocket, the likes we have not seen since the early 1970’s.

As you look at the ‘Big picture’ charts, Wheat, Soy Bean Oil, Cattle and Hogs, you’ll see the staggering magnitude of this reflected in these commodity charts. The price range before the early 1970’s, I’m calling Level #1. The second Level is from 1972/1973 - 2000. The third Level is just building momentum and will be as huge in comparison as Level #2 was to Level #1. With in 2 - 3 years, ALL of the ‘first’ of the “big” moves to come over the next 15 years or so will be complete.

The Energies complex was first to move and Metals, second. Grains took off about 6 - 8 months ago (today is 18 May, 2007). Meats have not decided on a launch date yet, but they’re very close, so what does that leave us with? Coffee, Sugar, Cocoa, Cotton, Lumber and what about O. J. OJ has already gone for a home run, .60 cents to 2.10 dollars, sneaky and quiet. I would expect OJ to drop back to the 130 level or at least consolidate for some time before continuing up to about the 4.00 level. These I’ve included with OJ are going too, bet on it, a couple of months and they’ll leave quietly so as not to attract much attention. Coffee is staging now much the same way OJ did from August 2004 through February 2005.

The ones I’ve described as already having taken off are merely in the first stage of their journeys and most Grains are in Consolidation areas. So no you have not missed anything yet and actually you’re exactly where you want to be at just the right time.

Each individual commodities chart pattern is different and unique just as a set of finger prints are unique unto themselves. I should mention that a site with a good set of comprehensive, historical charts, stocked with every daily chart that exists for every Commodity in its recorded history is a must for someone like me and I have that. It’s available to you as well.

What about Bonds, Currencies and Indices? What about the Stock Market?

Simply put, the Stock Market is getting ready to put on a show the likes we have not seen since 1998 and 1999. The sky is the limit, really. Get in now while you can, though it won’t last long once underway, 24 months tops. I can help you there too as Ted’s chart reading applies to any and all Markets that have a traceable history. Ted may have made more from Stock Markets than he did Commodities, the charts work exactly the same way.

How long can the Bond Market hold? This one I can not nail down because there are too many fingers in this particular pie, even the “Boys” are having a hard time controlling this mess. Well with in 2 years if they have not already started, this Market complex will go down and hard.

As of 5 August 2007, Stock Markets have been highly volatile for about 3 weeks and when you go to the Nasdaq Chart, you’ll see the main thing I pointed out was the lack of volatility as of May 2007. Now we have it.

As I watch “Money Channels” from time to time on TV to catch some Commodity prices, I find it utterly comical that it seems no one has a clue what is coming next. Very, very few “high paid suits” will commit to any definite direction the Commodities Markets are heading and are a perfect example of the “box” these people find themselves in. They are contained and limited by everything they have learned. Their eyes have been trained to focus on all the wrong balls.

Meanwhile, I sit and look at my commodities charts and can say without any hesitation whatsoever, the Stock Market as a whole is going to explode over the next 12 - 24 months.

The Currencies

The Euro, Swiss Franc and British Pound do the opposite of what the U S dollar does 99 out of 100 trading days. I expect the Dollar to be dragged back north from the current 81 level as the Stock Market makes its move north, this should tell you what I expect from the other three. What about the Yen? Yes, what about the Japanese Yen. One of these and it will not be the US dollar, is going to be the strongest Currency in the world 4 - 6 years from now and I can help you play this particular Currency as a retirement fund.

Level #3 on the commodity charts is NOT going to be, ’let the good times roll’. Everyone’s pocketbook and wallets will be stretched to the breaking point. There will never be another legal opportunity like this for many years to come to take advantage of what may not be such a great time in history. When faced with a negative, turn it into a positive. All you have to do is E mail me to get the ball rolling!

I am and already have taken advantage of knowledge that has developed over the last 8 years or so. The road I went down then has led to this, I also have a family to care and provide for. I have a 6 and a 7 year old. I’m 48 years old. So I’m late. I’ve been late all my life, but I’m here now.

You may be asking yourself why I am giving you all this information on a Silver platter?

Simply put, even with what I am giving you, unless you are in the 5 percent category that really know what they are doing, your chances of taking FULL advantage of these markets are practically nil. It’s just the nature of this game. I am offering to assist. Also, in my heart, I do not believe more than a handful of people in the world know what I know. I believe this makes me unique.

So how did I get to the point where I could read so much into the charts: Ted’s knowledge and my persistence basically. I had by the end of 2002 a good grip on Ted’s principles, however as well as they served me, I was still seeing things in the near term perspective as well as from a “Level One” perspective, and not the ‘Big Picture’, and at the time I had no clue that this Big picture was playing out before my eyes because I had my eyes focused on daily commodity charts looking for opportunities; not where they needed to be, on weekly and monthly commodity charts.

Late in 2004 what I started seeing that knocked me over were HUGE triangles, with ‘shake outs’, some with re-tests already in the works. At the time I was focusing on Grains, then, I went to them all and looked. What I was seeing was simply incredible as well as staggering. This is when I keyed in on Energies and Metals. Looking at daily commodity charts I would never have seen any of this, but on weekly and monthly commodity charts, it was right there.

If you think about it, it makes perfect sense. Ted always geared up for 6 week triangles or head and shoulder formations of similar duration especially after a prolonged Accumulation Phase. 6 weeks is the key though, why would I go to anything but a daily commodities chart when this is what I have been taught and this is what my mindset at this point is in looking for formations of this duration of time?

I’ve described Levels 1, 2, and the coming 3rd. The coming third is going to be HUGE, so why wouldn’t the chart formation that generates this hugeness also be of similar size? Of course it would. All chart formations that relate to the scale and magnitude of which I’m referring can be found not on dailies, but on weekly and monthly commodities charts.

The example of my first commodities trade based on this broadened information is a perfect example. In Natural Gas I show you the 5 year triangle, and as well, as I entered this trade, I happened to be placing myself at the very beginning of a Ted special, a 6 week flat top triangle, so in this we have both. The 6 week triangle did not alter my view of the big picture, however it validated the beginning of the commodities trade for me and also the following needs to be kept in mind, only on the September contract did this ‘nice’ 6 weeker appear. On the front months that ‘normal’ traders would be trading, no such formation occurred. This 6 week flat top you would have had to really do some unusual digging to find.

By January, 2005 I was convinced what I was seeing was the real thing and not my imagination running wild. In Ted’s day and even throughout the second level, a 6 week chart formation on a daily chart, such as a triangle or head and shoulders was something that was all you needed to find once, twice or if you were lucky, three times a year. This was all you needed.

I can remember what Ted said on a cassette recording I had of a seminar he gave on the Commodity Markets in 1977 or 1978 and it went something very close to this: “If a fellow can just hold himself back, to two or three times a year, heck, even once, it’s all you need.”

What does this statement tell us? Number one, he is saying just how difficult it is for the average commodities trader to be patient and not get trigger happy. In my experience patience is THE biggest obstacle to overcome.

Number two, he is telling us that true success in these Markets is having patience to wait for the right chart formation and then play it for all it’s worth. Once or twice a year, it’s all you need to do if success and profiting from these Markets is really your goal.

To take full advantage of these Commodities Markets you need to understand that you are waiting for a big move to fall into place, then hold yourself back until the timing is right for an entry into this Commodities Market that results in success ON A GRAND SCALE. There are plenty in the works now and will be for years to come.

I’ll give two examples of my learning curve. At the time, after digesting Ted’s material over and over, I had a grip on looking for commodities chart formations, but I still did not have the “Big Picture”; however the following two trades validated in my mind that the light at the end of the tunnel was for real.

The first was in Pork Bellies spring of 2001. Below, on the daily commodity chart for the March contract, I made this out to be a ‘flat top’ triangle, one of Ted’s favorites. Few chart formations will reach up, slap you in the face and introduce themselves. You have to dig, use your imagination and dig a little more, then evaluate if what you are seeing is really what it appears. Notice the ‘shake out’ on February 5, 6 and 7. This broke the trend line set up with bottoms on December 1st and January 10th. This was it! I pulled the trigger and ‘bought’ one contract May Bellies during this ‘dip’ or ‘shake out’. I bought May because time was running out on the March contract. On February 15, I ‘bought’ a second contract as prices broke above the triangle. I had entered a ‘Ted’ trade and success was looming. At the time, I had never taken profits and brought them home and my wife ‘reminded’ me of this fact in no uncertain terms. Long story short, I ‘crapped out’ at the .78 cent level with huge misgivings but with a profit.

I was disappointed in myself for listening to my other half, however in effect, I had executed my first ‘real’ and successful commodity trade.

Below are ( 2 ) March dailies and ( 1 ) May:

True validation came with Orange Juice in summer 2002. Looking at the September daily commodity charts below, you see a dip in early April, basically flat lining to the 3rd week of July. The dip down through May 7 and 8 was the ‘head’ of what developed into a beautiful ‘head and shoulders’ formation. I bought in somewhere around the 22nd of May with 2 contracts. This was for me at the time a true patience tester. A whole month went by with nothing happening. I started doubting myself. I was literally on the phone with my broker ready to bail on June 20, when he told me OJ was up nicely, so I thanked God and stayed, then came the down turn. The psychological torture intensified.

As prices ‘gapped’ and broke south July 3rd, I made the decision to hang in there praying this was another ‘shake out’ and of course on top of everything else, 4th of July that year fell on a Thursday, so I had a fun filled 5 day wait for Markets to open back up Monday morning. July 10th prices broke north and I bought 2 more contracts. Another long story short, I bought heavily all the way up till I bailed out at the 98 level July 24 and made 11 grand. At this point I even had a clue where OJ was heading. I figured on 105 because of resistance levels during past years and as you can see OJ topped at about the 106 level. This was a big turning point. Not only did I evaluate the chart action correctly and my patience held (barely), as well I pegged where OJ would top out or at least go into a stall zone or consolidation.

Below are both September dailies, the first on medium density and the second on high:

The commodity charts below will help you understand as I describe what I would call the ‘Big Picture’. First I’ll start off by explaining what a ‘daily’, ‘weekly’ and a ‘monthly’ chart is. Daily commodity charts generally run from 6 months - 18 months in time duration depending on what site you are looking at and how you have your settings. Each vertical ‘tick’ mark is a line displaying that day’s activity for a given Commodity Market. The top of the line is the highest price hit for that day and the bottom the lowest price. The smaller horizontal ‘tick’ extending to the left is the price where that Commodities Market opened. The horizontal ‘tick’ extending to the right is the day’s closing price or ‘settle’. The horizontal ‘ticks’ as I’ve just explained hold true for weekly and monthly as well but on a weekly and monthly basis. A weekly commodities chart, each line or vertical ‘tick’ mark represents one week’s total activity and as you might expect, on a monthly chart (that can go back as far as 1959 with many Commodities) each vertical line represents one month’s total activities, again with opening and close.

Look at Soy Bean Oil chart below. This is a monthly dating back to 1959. From 1959 until 1972 notice the trading range give or take between 7 and 13 cents. This is what I will call trading range #1. You can cite economic, geo-political or any other reason you wish, but starting in the early 1970’s most Commodities exploded as you see on the Bean Oil chart. A new trading range we will call # 2 emerged and has lasted until about 2000. This new or second trading range occurred in all Markets with the exception of the Financials, Currencies, Energies and Indices. Most of these Markets were not even traded until the 1980’s, though those of us that are old enough can remember the Gas lines of the middle 1970’s.

In January 2005, I started picking up on tremendous commodities chart formations. Two complexes caught my immediate attention, one developing (Metals) and the other already underway (Energies). At the time I stumbled on these, I wasn’t sure if I could draw the same conclusions from weekly and monthly commodities charts the way I could from a daily. Ted never talked of this. After going from Crude to Unleaded Gas to Heating Oil and back, I finally looked at Natural Gas. This is when it finally hit me square between the eyes, I just couldn’t believe it!

I will take you through some charts or Markets. I will explain, dissect and describe what I see and the reasons for my observations, and of course what it all means. Soy Bean Oil I’ve briefly described above. Wheat, Cattle and Hogs will also give the ‘Big Picture’ with the levels, 1, 2 and the coming 3rd I’ve talked about, however in order to better understand we’ll start off with two beauties that were real trades for me and are perfect examples of what we need to cover.

Natural Gas

This was my second commodity trade during 2005. I have drawn in the lines that are pertinent mainly showing three things: the triangle, shake out and re-test. Also and most importantly, this is a monthly commodities chart. At the time, I was able to use a weekly, high density chart that gave more definition. I had to bounce all of this off daily commodity charts running from March through June. Natural Gas trades each month of the year and as I was looking at this in January of 2005 the closest viable month to trade would have been March. Actually in this Commodity Market, the March contract only had about 2 or 3 weeks left before moving to the next month out, April, and for reasons we will go into I picked September to trade.

As you can see this ‘monster’ started building steam in Spring of 2000, topping in December of the same year. As a rule of thumb ascending, or triangles that break north, have 3 bottoms and 2 tops. Many times commodities prices will break through at, during or with the 3rd top. There are a few ways to interpret this and every triangle, and we will start with the more obvious.

On the monthly commodity chart of Natural Gas below, the bottom line I have drawn on this interpretation is basically a rolling bottom not clearly defined by 3 actual bottoms. We will leave that be for now. The tops are beauties and are almost perfect. The 3rd top ended in September 2004 and continued directly into a breakout the following month. Something I had to learn from experience is this: more times than not, after a break out from a triangle, commodities prices will come back for a re-test. This was crucial information for me to pick up on for I can’t remember Ted talking of this.

Why does this happen? If you want to analyze this properly, from Ted’s perspective, then you have to look at this from the perspective few people want to. If this was your game you had set up and you knew there were some smart alecks out there that had caught onto to at least part of your game wouldn’t you throw them a few curve balls? Of course you would.

Most chart readers know that triangles can be traded from successfully from time to time. Most do not look at it from the other side though. To make a commodity trade ‘long’ from this (or any) triangle and see commodities prices soar for, in this case, 5 weeks, because look at how November opened, higher, at this point you are literally on top of the world, psychologically, because at this point you are about $20,000 good and the sky is the limit, right? As Glenn Beck likes to say, ‘not so much’, because here comes the down turn and it’s a biggie, all the way back (and farther) than where you started from. How’s your world now at the end of December when you are down a few thousand bucks when a month ago you were MANY thousands of dollars in the plus column.

About 75 percent of the time, expect a re-test. Here we have two re-tests. Well, actually three, but we are getting ahead of ourselves. We need to deal with that 90 thousand dollar ‘blip’ you see rising from about the 7 level to the 16.

First off let me explain how I played it.

I figured this for a 6 to 9 month deal considering the volatility of Natural Gas (high) and the size of the formation (huge, 5 years) little did I know at the time!

I decided on September because of the time frame I was figuring on. I entered the Commodities Market ‘buying’ one September contract and was filled at 6.220 (long) on 13 January.

Keep in mind I’m trading based from what I’m seeing and interpreting on a Monthly commodity chart formation and actually at the time a weekly high density chart was used as well, so I had the ‘Big picture’ and the re-test was the real key but I had to go to dailies in conjunction with in order to enter the commodity trade successfully and I had to see how the smaller picture related and carried over and coincided with what I was seeing on monthly and weekly commodities chart. If I had only been looking at daily commodity charts of Natural Gas at this point, no trading would have been done. There was nothing ‘super’ solid to trade from.

I entered this Commodity Market based on the re-test of the formation on the monthly and weekly. September 2005 daily commodities chart on the other hand showed a ‘flat line’ from May through September of 2004 at the 6.000 level, then a rise up to about 7.500 in October then a slow down turn in three steps bottoming in January 2005. This is what I was dealing with the 1st and 2nd weeks of January, September 2005 daily commodity chart as I’ve described above and the monthly showing a 5 year triangle with a completed re-test being the real key.

This is how I justified entering this Commodities Market when I did. As mentioned, the primary key was the false break out and the following retest on the monthly commodity chart, but were commodities prices going to zing down a little farther was my main concern. As December ended commodity prices were sitting on the trend line I had drawn in. With January, commodities prices ‘opened’ lower, continued down then came back up into the triangle. So at this point, I needed to evaluate daily commodity charts, September because this was the month I was going to trade, plus March and April because they were front months.

I’ve described in general terms, so let’s examine in detail what, with daily charts I was keying on. I mentioned before the three step down turn starting in October and bottoming in January. First, on 9/16 a low was hit of 5.900 during the ‘flat line’, also on 9/16 this happens to be the ‘head’ of a very nice head and shoulders formation, regardless remember this number. Starting in October, we roll to a bottom in January, it slipped down ward in three scooping steps, ‘gapped’ and bottomed at 5.870.

The primary key is that the monthly chart is at a point where I’m sure a turn around is either occurring or is at least close and has made its way back up into formation. This is reflected on the September daily after 1/3 seen on commodity chart 10 with commodities prices rising up to what would eventually be the top of the flat top I was entering. On the September daily there are 3 keys that play into the equation:

- The low set on 9/16 of 5.900 was broken on 1/3 at 5.870.
- Just before settling at the low a "Ga" occurred. Gaps are "curve balls" that most commodity traders don’t know to make heads or tails from. Most of the time when a Gap occurs on the commodities chart, a similar amount of movement in the same direction will result. On the September daily there is a Gap and then commodity prices settled. On March and April dailies however, two Gaps of similar duration resulted, both equal in there their displacement on the commodities chart. Gaps throw traders off balance and keep them guessing.
- In my experience so much about what happens on the commodity charts comes in threes that for me the significance of the three step down turn was big. So as it turns out, three things occurred that were key. The down draft from October to January came in three waves. It finished with a Gap, and broke new or old territory depending how you want to look at it.

These were the pieces of the puzzle that determined my entry on January 13th. My entry into the Commodities Market was actually the start of a 6 week flat top triangle with a ‘shake out’. To Ted Warren ‘shake outs’ were key elements in the form of what I’m calling curve balls. Look at the monthly commodity chart and you’ll see I have pointed out a 2 month ‘shake out’. In Ted’s simple way of putting things, ‘this is for added value’, I would say more fuel for the fire and of course what is a ‘shake out’ really doing? It’s shaking out a certain percentage of commodities traders. Why? A shake out breaks a set trend line, it also breaks your confidence on what you’ve looking at all this time. The fear factor sets in and it’s real. As a commodity chart reader is looking at a formation he or she is anticipating commodities prices to ‘pop’ one way or the other and when commodity prices ‘pop’ in the opposite direction a lot of things can and do go haywire with the mental well being of the commodities trader. There were actually two more ‘shake outs’ that occurred after the break out resulting in the re-test that I was keying on. So what I based my commodity trade on was the fact that this triangle had a solid break and a re-test that also turned out to be a ‘shake out’. I bought during the ‘shake out’ after commodities prices rose back up and into the triangle.

Before we go on maybe we should get off track a bit in order to help clarify things as we move along. Let’s talk about trend lines and ‘stop losses’.

Often trend lines are set based from "support and resistance" levels. The bottom of the monthly commodity chart is a good example of a trend and the line I drew might be a little different from the next fellow, but it would be similar. Below, I’ve drawn the top line to give the most obvious top to the triangle. Often I like to take out the single or double line ‘splurges’ (I can’t remember what Ted called this) but I call them ‘chaff’. Real tops and bottoms are made with a handful of tick marks, so on a monthly commodities chart a top may constitute a small or a large handful of months. Comparatively, on a daily commodity chart a top or bottom would occur over maybe a 4 to 8 day period. As you can see, chart interpretation can be analyzed different ways. The true art is to get ‘it’ right as it relates to the ‘Big Picture’. The right way can be a few different variations on the same formation. As you learn keep it simple at first, other variations will reveal themselves in time.

The other side of the equation knows there are many chart readers out there that use trend lines as inviolate, setting ‘stop losses’ based on them. This is why I like to see trend lines be broken at some point as they are more often than not, but you have to have absolute conviction in the ‘Big Picture’ other wise confidence can be shattered.

‘Shake outs’, as Ted calls them are exactly this. When a ‘shake out’ occurs a certain percentage of commodity traders already in the Commodities Market, bail, the other side has successfully ‘shaken out’ riff raff, and often this occurs with the trader’s use of ‘stop losses’.

‘Stop losses’ for somebody that has conviction on the ‘Big picture’ are not used. In the past, probably 90 percent of the time I used ’stops’, I was ‘stopped’, lost money and two weeks later watched as ‘my’ Commodity went where I knew it was going all along. Talk about pissing you off. Then the ass kicking and brow beating starts, nothing’s worse than bad mouthing yourself. The ‘ripple effect’ carries over into your workplace and your home. Good commodity traders do not use ‘stops’, when they have misinterpreted, they simply understand quickly that they evaluated incorrectly and they bail.

Back to the trade. On 2/16 commodities prices dropped and resulted in a ‘shake out’ of this 6 week flat top. I placed an order based on the high just prior to 2/16 which was 6.515 and as commodity prices started to climb out of the ‘shake out’, my ‘buy’ order was executed on a break above 6.515 and was ‘filled’ at 6.530 on 2/23. Commodity prices rose and then a one day re-test happened and from there commodities prices climbed steadily just past the 8.000 level, then we started on another down turn. This was an agonizing 2 months, but so be it, the time passed as it always does and finally we turned up early in June. As commodity prices rose then went into a mini consolidation I bought again on 6/3 at 6.935. This turned into a 2 month consolidation period. Commodities prices finally let loose at the end of July and now I had a few things to consider.

First, my September contract was coming due in a few weeks, so I ‘switched’ over to December on 7/21. I added no additional contracts, simply called my Commodity Broker and ‘sold’ my three September contracts ‘at the market’ and ‘bought’ 3 contracts December ‘at the market’. I was ‘filled’ ‘buying’ three December contracts at 8.565 and ‘filled’ at 7.420 on three September contracts I ‘sold’. Always a good thing to check and make sure your orders are placed correctly, as I don’t like to use ‘online commodity trading’, the sound of my Broker’s voice to me is reassuring.

Based on September’s commodities chart a consolidation occurred between 8/3 and 8/8. I ‘bought’ one more but December this time, so now you are looking at commodity chart 11, and was filled on 8/9 at 9.745. Commodities prices went into yet another stall or consolidation and I interpreted this a ‘head and shoulders’ formation, a bit lopsided but there none the less. I bought my last contract on 8/26 at 10.840 and from there ‘topping’ action started.

A ‘top’ can take a few different forms and at the very least volatility will double, triple or just sky rocket. The consolidation area at the 12.000 level from 8/29 through 9/16 was a little ‘hairy’ at first but after a handful of days (and nail biting), commodities prices quieted somewhat, however I decided on the next break, hopefully northward, I would bail.

On 9/19 the break happened and I ‘sold’ my 4 contracts at 13.670. So let’s add up our slice of pie.

For the September contracts, I bought one at 6.220, one at 6.530 and one at 6.935. We add these together and get 19.685, now we divide by three (amount of contracts), we get 6.561666, round off to 6.562 and we have an average ‘buy’ in price for all three contracts. When we switched contract months we liquidated all three at 7.420, so we subtract 6.562 from 7.420 and get .858. Each point is worth $10 dollars, so we made $8,580. per contract so in total and thus far we have made $25,740.

Now we take all contracts from December and do the same. We bought (during the contract month switch) 3 at 8.565, then bought again at 9.745 (one) and again at 10.840. So we do the math again and we get, 3 at 8.565 times three and get 25.695, then add 9.745 plus 10.840 and we get 46.280, divide this by 5 this time and get 9.256, subtract this from our exit price from the Commodity Market all together of 13.670 and get 4.414.

First let’s add up 4.414, 5 times and we get 22.070, this gives us our total points accrued on the December commodities trade. $10 dollars a point and we get $220,700., add in $25,740 from the September commodity trade and we get a grand total of $246,440. Minus commissions, September was a total of 6 because we bought 3 and sold 3. December we bought 5 and we sold 5, so 10, 10 plus 6 is 16, so our total cost to make this commodities trade was $1600 or $100 per commodity trade. This was a real trade.

Nine months of patience, a little nail biting and a little more patience and not only were things great but Silver was coming into play!

Before we go there we need to finish up with Natural Gas. This ‘blip’ that enabled me to take home well over 200 grand is just that, a ‘blip’. This was the actual ‘breakout’ and as I’m writing this we are doing a major re-test. Remember the levels I talked about. The third level for this Commodities Market will ultimately range between 7.000 and 30.000. This and all Markets can and will be played on a grand scale in a few short years. Do you want to go it alone?

Silver

As far as Triangles go, it’s tough to beat this one. Goya would have a hard time reproducing the quality and fingerprint or even majestic beauty of this one.

Look at the bottom I’ve drawn in. That’s based on 7 points along which this line makes contact and the 12 week trend line breaker in September 2005 is the ‘shake out’. It would have been ‘easy’ to have entered this Commodities Market in Spring 2005, anywhere with or after the second bottom. If you had, the wait until final breakthrough would surely have been unbearable. Time is ALWAYS on the side of Commodity Markets and this is one of their favorite ‘tactics’ for getting people out of the Commodities Market. But with the ‘Big Picture” you can play their game.

The top line can be drawn in different positions but here I’ve drawn in from the absolute tops. Commodity chart 13 is how I would actually interpret the top of this beauty, but in any case, a better triangle you may never find.

How do I know if commodities prices will go north or south from a triangle? Number one, from the ‘Big Picture” I know everything is staging for huge moves. Most commodity charts are now sitting on re-tests, have already broken and are in consolidation areas or are in the last stages of Accumulation phases. Let’s look at the following move up out of this triangle throughout 2006 until present. This can be construed as a triangle, and compare the two triangles and notice the difference in amount of volatility. Commodities prices always get more volatile as they move farther north. Considering where I believe Silver is going to end up, this could actually be a good platform to trade from and will be in time, but note the ‘Head and shoulders’ I’ve drawn in on chart 13 indicating downward movement from this formation. Personally I would like to see some more ‘down time’, however if commodity prices break above 1480 then it could be on its way.

The triangle I traded at the 640 to 760 level is technically called a Consolidation area. They can be as short as a few days and as we see, much longer. So what is actually happening during these phases of a move? From Ted’s and my standpoint, these are areas where the traders’ patience is tested, nothing more, nothing less. The opposite side of the looking glass is trying to get you to take your ball and go home. Exit the Commodity Market. Remember, they don’t want you along for the ride; it’s their money after all. This is their ‘game’, their mind set.

In early January 2005 it appeared to be the ideal time to get in because two tops had been formed and Silver was making its second bottom, however, I rightly decided to wait on this and go with Natural Gas because of sitting on a re-test with Gas. Why not trade both if I felt strongly about both? The size of my account.

My 20 grand went to 18 with a Bean trade I liquidated at a loss of 2 grand. I had traded beans before the ‘Big Picture’ took hold, so I got out of this to concentrate on Gas. The margin on Natural Gas was about 6 grand, Silver was about 2 and a half grand. A rule of thumb for me is never trade more than half of what’s in my account, so I had about 9 grand to work with and as this would have put me at just about the 50 percent mark I still did not feel comfortable enough trading both at the same time and I wanted to give Natural Gas every chance I could. As it worked out, I did enter the Silver trade 3 days shy of exiting my Gas trade. In any case I feel I made the right decision. Again, always err to the side of caution and especially patience with Commodities Markets and as we’ll see, the two could not have coincided better.

Again I was bouncing commodity charts off one another, this time a weekly against dailies. I’ve given you two interpretations, both work but the flat top adds the re-test. At the end of August we start to see the ‘shake out’. On the December and March dailies, the ‘shake out’ turned out to be a beautiful ‘head and shoulders’ formation. It just couldn’t get any better! I was a bit nervous about the Gas trade because I was still waiting on the ‘break’, up or down.

On September 16 I passed up December and went out 6 months again to the March 2006 contract and bought 6 at 726. This was on a break above the highest commodity price of the right side of the shoulder. I was now expecting a re-test on the weekly commodity chart; the daily had given me what I needed to enter the commodities trade so now I was focused on the weekly. On top of that, 6 contracts was a lot for me, I had never started any commodity trade with 6 before so I was more than content to wait for a re-test and if it did not happen a stall zone would surely be in the cards early on.

The re-test came in early November but I was waiting on a re-test down to the 740 level and it never made it there, so I waited until the 16th before committing any more contracts. 16 November I added 3 more March contracts at 806. Silver went up nicely through the first week and a half of December then slammed back sharply.

As Silver finally started to rise again a lot of volatility came into play. For three weeks at the start of January commodities prices had big trading ranges but ended up going sideways. I went back to the big move of 1980 and looked at some dailies from the beginning of that move, so now I was bouncing more commodity charts around. I decided to buy again if commodity prices broke above this consolidation zone. I placed an order a few days prior and was eventually filled on 1/25 above the last high during the consolidation of 935.5 and was filled on all 6 contracts at 937. Commodities prices rose sharply and then crashed all the way back to and past where I had bought in with my last 6 contracts.

What had I done wrong? Number one, I had been keying in on the March daily and not the weekly as I should have been, as well, the May chart that I would ‘switch’ to was showing a pretty solid triangle as the March daily was less defined. The weekly showed a sketchy flat top triangle and of course there would be a re-test and I got it. Number two, I had bought contracts at about the time I should have at least been thinking of ‘switching’ over to the May contract.

Expiration of the March Silver contract for ‘long’ positions was 2/28. I called my Commodity Broker and he told me it would be best to start liquidating no later than 5 trading days before expiration. I waited until 2/22 to switch; ended up selling 12 at 953 and 3 at 951.5.

I re-bought fifteen (15) May contracts: 6 at 964, 6 at 962 and 3 at 961. On the March contract, I actually had switched and bought in during the second half of what would become a ‘head and shoulders’ formation, while on the May chart it turned out to be just after the re-test of a triangle. I bought 6 more on the break above the old high of the top of the break out form the triangle. I was filled on 6 more 3/2 at 982 and this was the last ‘buy’ for this commodities trade. 3/30 to 4/06 another consolidation presented itself but commodities prices were at this point going almost straight up on the daily as well as the weekly commodities chart, so I knew things were getting dicey.

I exited this commodity trade on 4/10, ‘selling’ 12 at 1232 and 9 at 1234. Now let’s do the math.

I bought 6 at 726, 3 at 806 and 6 at 937, our average in with all 15 contracts is 826.4, call it 826. Sold 12 at 953 and 3 at 951.5. Each point or cent worth $50.

On the first 12 we made $76,200 and the other 3 we made $18,825. Totaling $95,025.

On the May contracts we did this: bought 6 at 964, 6 at 962 and 3 at 961 and 6 more at 982, average in and we get 968.14, call it 968.

Exit price was 12 at 1232 and 9 at 1234. The first 12 we made $158,400 and the second 9 we made $119,700. Add them all up and we get $373,125.00, again not bad for a little over 6 months and patience.

This and the Gas trade was all generated with a $20,000 account in 15 to 16 months time and was played conservatively.

Let’s go to Wheat next

I would imagine the next or 3rd Level’s trading range to be from about 500. to 1500. level.

This is an incredible triangle to say the least, with a breakout occurring in May/June of 1995 with severe re-test taking us down and into a ‘shake out’ lasting 4 years. The breakout in 1995 was generated by not only an internal triangle of the whole 30 plus year formation but a head and shoulders as well, somewhat similar to what we will cover next. So if I’m interpreting this commodity chart correctly and I have not one doubt that I am just how big do you think the resulting move will be?

Remember ‘shake outs’ and re-tests are for ‘added value’. I’m sorry, but the term ‘staggering’ never ceases to enter my mind. This ‘shake out’ is also an Accumulation Phase that results in two more ‘pops’ and re-tests until we finally get to another beauty.

This is Wheat again on a weekly showing the move up after the second re-test at the end of 2004, beginning 2005. I’ve drawn the triangle in as I’ve interpreted it. We have a ‘shake out’ in the beginning of September of 2005 then a quick and short break out the last week of the same month. Now we go down to yet another ‘shake out’ that emerges into a head and shoulders formation! This is a nice neat package all in one year from start to finish, included a triangle, a break out with severe re-test resulting in the H & S, a final break in February 2006 with a quick re-test 2 weeks later, then enough up and down action to drive any trader nuts, but were nothing more than further re-tests of this one year formation, and finally in September 2006 we get what we wanted from this son a bitch.

Without having a good grasp of chart reading, let alone the ‘Big Picture’, would you really know what you were doing if you were trading this Commodities Market anywhere along the 2 and a half year line, ‘short’ or ‘long’, at any given point?

I’ll be a smart ass. Maybe the crop report could have given you some insight?

So what do we have with Wheat, besides smallish formations within bigger formations inside yet bigger formations until you have the whole picture in place. This is called the ‘Big picture’ my friends. Holy cow right? You got it!

So what do we do with Wheat at the present time? Let’s look. I’ve mentioned ‘things’ seem to come in threes with these Markets or charts as I prefer to call them because you can attach any label you like to this or any ‘solid’ chart formation and commodity trade away, only thing that matters is knowing how much each ‘tick’ is worth.

This commodities chart formation that just happens to have a ‘Wheat’ label attached to it I did play coming out of the head and shoulders formation and I bailed at the 510 mark as it was on its way back down from the first ‘top. How could I in all good conscience not have played this? It was there. It is what I do.

Currently my attention is focused on two other Commodity Markets. Pork Bellies is very attractive at the moment and basically a ‘gimmie’, however we are talking Wheat.

Back to the threes. If you were to get in today, you’d have to have an account to support some down time of possibly 5 to 6 grand per contract and then wait it out. This is May, trade December or even March of next year, you’ll get your results.

The trend line I’ve drawn in shows three bounces, trend lines are meant to be broken and this has not happened yet, that is why I say you would have to be able to support more down time to perhaps the 390 level give or take. If you get in and it tanks good, better for you, just ‘buy’ on the way down. It will turn around. You can take that to the bank.

I usually bounce all Grains off one another when I trade one. At the time of the head and shoulders on Wheat for example, Beans was giving nothing away even though I knew they were set to take off as well. But the formation on the Wheat chart was too good to pass up.

Bottom line is that I’m not concentrating on Grains at the moment, but if you want to trade them E-mail me.

Let's talk a little about Fundamental News, its impact on Markets and ‘Insider’ Trading.

Too many commodity traders look for reasons and answers in all the wrong places. Can’t fault them for trying I did the same in my early years and inevitably everyone really does want to be successful.

The fact is Fundamental News such as crop reports, weather analysis and Media information among much and many other ‘sources’ of available information can and sometimes do alter a short term pattern in a chart, but will NEVER alter the ‘Big Picture’ in any way. Period. This information can and will do nothing but "contain" you.

‘Insider trading’ is really a misnomer for something that occurs often and that again is a miniscule part of the whole picture. Two examples: take Martha Stewart a few years back. She (allegedly) received information about a certain Stock and ‘sold’ before it tanked. Well I’m sorry, but what would you have done? Hung in there to see all your money go down the drain? This kind of ‘stuff’ goes on ALL the time and she got caught. What she did was well within the realms of ‘Human Nature’ and she did not alter the ‘Big Picture’ one iota. Am I condoning her actions, no, just stating facts. She is human after all and for the most part we all seem to have common and similar motivations driving us.

What about what I heard on The O’Reilly Factor the other night. Bill should really have his facts in order if he is not ‘intimate’ with his subject, be that as it may, he made a statement that insinuated in no uncertain terms that George Sorros, by himself mind you, was the cause of the huge devaluation of the British Pound that started toward the end of 1992 because ‘he’ ‘shorted’ the Market. Oh boy.

There are no individuals in the WORLD or even groups of individuals, not even Hedge Funds with Billions at their disposal, that are able to alter the ‘Big Picture’ in more than the smallest way. The amount of money that controls and maintains these Markets is so huge, to even try to think about it in relative terms would be silly.

Also remember what I said about the U S Dollar versus the Euro, Swiss Franc and British Pound? Whatever direction the Dollar goes the other three do the opposite. Guess what the U S Dollar did at the same time period the British Pound tanked? That’s right, the Dollar soared for the same time period. So what does this have to do with the price of tea in china, maybe that G, Sorros went ‘long’ the Dollar at the same time?

The following are more commodity charts with my interpretations along with explanations as how to look at these as trading platforms for upcoming years. After a few more years of ‘excitement’ with the Stock Market, at most, there will be nothing left to put your money into legally except these Commodity Markets and these Commodities Markets have 15 - 25 more years of nothing but mountains of money available to you. Go it alone or I can help.

Soy Bean Oil:

Here we have the Levels I’ve been talking of. Notice the final dip from 1966 through 1968 breaking previous lows then the highly volatile upturn from 1969 through 1971 culminating in yet another final dip again breaking lows of the previous two years. The final dip we have from 1999 through 2002 is a shake out of the triangle. It does not break old lows set in August/September 1986 but clearly breaks the trend line set by the bottom of the triangle. We have a re-test that comes back and touches the top of the triangle and breaks slightly through. Are we up, up and away yet? Yes, we are at the beginning of another move such as the one occurring throughout 1973 and 1974. A good time to have caught this one would have been a year ago but another opportunity will be coming soon to enter this Commodity Market if one were interested.

Crude Oil:

As you can see, after things quieted down after the 1970’s we tumble down into what I will interpret as an Accumulation Phase from 1986 through the beginning of 1999. The ‘spike’ in 1989 was during the ‘Gulf War’ so as a good example this Commodities Market was ‘Manipulated’ at this time; however was the ‘Big Picture’ altered? No. If you look closely from January 1988 through January 1989, I’ve pointed out a head and shoulders with 2 re-tests, the second just before the explosion upwards. Also during a flat lining Accumulation phase many more times than not you will see a rise before and even more significant is the ‘dip’ below the flat line again breaking new or old however you want you look at it, ground. A different interpretation on this majestic Formation is what you see. I have construed this as a basically flat top triangle, this is just how my eyes are trained to see things at this point, you can debate merits or inconsistencies of my interpretation as you see fit but the fact is that it’s there. Now with this interpretation, the following triangle from 1999 - 2004 would be seen as a re-test of this longish flat top. Be aware there are formations within all of this that we do not see as well because this is a monthly on max density.

No matter how we interpret this chart, flat top or flat line, final dip or shake out, we see the end result moving up into a beautiful triangle of 4 plus years in duration. I would interpret this triangle as a re-test of the flat top simply because I believe Crude is about half way to where it is going in the near term of 4 years.

Heating Oil:

There are two reasons for even showing this commodity chart. One is that the resulting triangle is more clearly defined than Crude and the other is to let you know that Crude, Heating Oil and Unleaded Gas charts are very similar. As with Grains but even more so here, if I were trading one of this complex I would be bouncing charts of all three commodities markets off one another. Natural Gas is an entity all to itself.

Silver:

Some people claim the Hunt brothers had a big hand in the move you see in 1980. I got a bridge in Brooklyn that’s for sale as well. I suppose the Wright brothers were in charge of Commodity Gold at the same time period, as the Dicksons were taking care of Platinum and the Jones’ were building Copper toys. Maybe.

All Metals have taken off and are at their initial stages of their journeys, just as they ALL did back around 1978 through 1980. Palladium went huge in 2000 and is once again building steam.

People enjoy Gold but in these commodity markets, Silver is where money is. This time around, Silver will go higher than it did in 1980. I think there is time to wait to see what develops from this initial stage of the ball game.

Four more commodities charts, ALL great examples of what I’ve been talking of and the possibilities are endless with each:

 

Nasdaq 100 Indices:

Two months ago I was looking at Stock charts for the heck of it (a good site with good Stock charts is ‘Big charts’ or simply type in ‘stock charts’ and this site will be available), anyway as I was looking at Stock charts and I was absolutely blown away! I knew the Stock Markets were headed higher but I had no idea until I looked at what amounted to 100’s of charts. I concentrated on everything but Nasdaq for reasons of no consequence.

I’ll use S A P is simply a good example and nothing more of the 100’s of can’t miss ‘buying’ opportunities in the Stock Markets at the present moment. Currently this stock chart is undergoing a 3rd major re-test of a huge (2 year) Consolidation area I would construe as a triangle and is perhaps on its final leg down with an abbreviated re-test. Close of trading last Friday puts it at 46.06.

The above two charts are of the Nasdaq Indicies, I'm showing you a weekly and a monthly. The weekly is a high density chart depicting a "head and shoulders" formation. Also on the monthly notice the lack of volatility on the slowly ascending flat line culminating in the ‘Head and Shoulders’ I’ve noted on the weekly as well. Markets have to display a lot of ‘up’ time as well as volatility before they start down.