!!
(5)?

(3)?

(1)?
(4)?
(b)
(2)?

REPRINTED from 1/9/2011 !#!

(d)
[a]
(5)

(3) [b]
(c) (e)
(1) !$!
(a)
!! (4)
(5)
(3)
(2)

(1)

Last week¶s message that it would be prudent to wait (for shorting) on some
(4)
sort of ³sign´ was decent. The market did not trigger any sell stops (at 1233).
At this point, though, I¶m getting an ³itch´ to short this thing. Thus, I¶m raising
(2) my sell stop to 1253, the 23.6% retrace of the last leg up (Wave -5-). 1253
looks like it should be ³classic chart support´ as well. So, a break below this
level this week should lead to more selling. A break of 1226 would cause me to
!"! increase the level of shorts even further.

-y-
b

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 %
&'()
 
 
 

!!

(b)

(d)
!#!
(5)

(3)
(e)
(c)
(1)
!$!
(4) (a)
!!
(5)
(3) (2)

(1) Patience, on initiating shorts, was once again rewarded last week as this
overextended market continued to grind out shorts like chuck beef. This
(4) particular wave count is now ³out of time´ with -1- = -5- targets at 1291 and
1310 (-1- = -5- in %). Additionally, the last few weeks of pricing action is
beginning to look more like a ³corrective´ channel higher--it¶s not of an
³impulsive´ nature.
(2)

The bias remains to sell (initiate shorts) on signs of weakness. At this point the
!"! first level of support lies at 1262. Thus, we¶re raising ³sell stops´ to 1260. The
much more important level remains much lower at 1226. So, bulls can continue
to ³feel comfortable´ all the way down to 1226.
b

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Ë
 
  REPRINTED from 1/9/2011
Xur last look at the DXY presented a bullish ³impulsive´ wave count. The Wave -4- developed
differently than I had imagined, but this bullish interpretation is still viable. The Wave -4- was
longer enduring relative to the Wave -2-, but that¶s exactly what the requirement is for an (3)
³extended´ fifth wave«..

!#!
(1)

(b)

(2)

!!
(a)
(c)
!$!
!"!
The proposed Waves -1- and -3- here are of equivalent length; therefore, if this is an ³impulse,´
the fifth wave Ë  be the extended wave. The minimum target for the proposed Wave -5-
would be 84.70, for Wave -5- = -1-  -3-. We have remained 20% of a Max. Long in the DXY.
We were stopped out of our last foray into adding length, but given the bullish setup here, we
are of a ³buy dip´ mentality. For instance, there are layers of support at 80.69, 80.34 and 79.75.
*+,# New length will be added in the following manner: 10% at 80.75; 20% 80.40; 50% at 79.85.
That strategy would lead us to be 100% of a Max. Long position in the DXY at 79.85, right in
front of 79.75, which is the 61.8% retracement of Wave (1).

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Ë
 
 


!! !-!

(a)

(b)

(a)
(b)
!!
!!
!!.
-
!-! Last week¶s foray at ³scale buying´ the DXY was a loser. We bought 80% of a Max
Long at an average price of 80.10 and was promptly stopped out below the 61.8%
retrace at 79.70 for a 0.5% loss. X . We remain 20% of a Max Long and will
probably have that posture for ³a while.´ That¶s a core long position.


  
!!"#$%&& '(#&" &')

  *+
!+ 
Ë

+ +
+

*+,#

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REPRINTED from 1/9/2011

I must admit that the shape of the pattern up from the late July lows is the MXST
BIZARRE pattern I ever witnessed. It¶s indecipherable to me. In other words, it¶s
going to take me a lot more time to understand what we¶re witnessing and how it
might fit in the bigger picture. In the meantime, using classical charting methods, we
have what ³looks´ like a huge ³rounded top´ forming with a powerful looking move
lower from $1,424. If a major pattern did conclude around $1,424, then $1,397 would
be the ³stop´ level for new shorts, the 61.8% retrace. The ³rounded top´ idea gets
blown up on any action above $1,424. Good Luck here«.

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U%,-,)Ë

./. .

Last week¶s commentary wasn¶t completely useless. This rounded top looking
pattern was identified and 1397 was pegged as key resistance (61.8% retrace off the
1424.4 high). The market was repelled in front of that resistance level as bears seem
to be wresting control away from bulls. 1377.8 and 1392.9 look like good R1 and R2
levels in the week ahead as Gold looks like it wants to visit the 1320s.

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0X0U %+)

±/ "(

RBoB has been killing fundamental traders the last few months as it has
been rallying ³counter-seasonally´ on Brent Crude strength and refining
upsets. It¶s probably worth noting at this point that it¶s rallying right into the
61.8% retrace of the entire decline. Additionally, there is ³chart resistance´ at
$2.65--that¶s the level that RboB began it¶s unidirectional collapse in Xct. ¶08.
Bottom line: there should be a robust zone of resistance between $2.55 and
$2.65 for this gasoline component.

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 1 %+)

In comparison, WTI crude oil has been struggling to clear the 50%
retracement of it¶s epic decline«..

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 1Ë%+)
What should be troubling to ³Energy Bulls,´ besides the fact that energy has
been the weak sister performer in the commodity sector, is the ³Rising
Wedge´ that both WTI and RboB are sporting the last few months. Any
sharp break of the lower dashed blue line should be taken very seriously.

X 

!!
+
+



u
 

 

 
  


 

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 %/ '|/01 | 2/23%/ '|/01 | 2/23%/ '|/01

This report should not be interpreted as investment advice of any

kind. This report is technical commentary only. The author is NXT 4-(
representing himself as a CTA or CFA or Investment/Trading
Advisor of any kind. This merely reflects the author¶s "I" or "A" = Grand Supercycle
interpretation of technical analysis. The author may or may not I or A = Supercycle
trade in the markets discussed. The author may hold positions <I>or <A> = Cycle
opposite of what may by inferred by this report. The information -I- or -A- = Primary
contained in this commentary is taken from sources the author (I) or (A) = Intermediate
believes to be reliable, but it is not guaranteed by the author as to "1³ or "a" = Minor
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not for everyone. (1) or (a) = Sub-minuette
[1] or [a] = Micro
Here is what the Commodity Futures Trading Commission (CFTC) [.1] or [.a] = Sub-Micro
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