IMO. ThisTrading Range since the beginning of July has been...

IMO. ThisTrading Range since the beginning of July has been testing the supply volumesavailable – yes again and again and again. Intra and Inter day price range is narrowwith the average daily volume decreasing around mid June (32-37M per day) toend of previous wk (17.2M) to last Thurs (approx. 16.5M per day).

Fridayhowever was interesting as it represented (IMO) a repeat back-test of thatsupply to its lowest recent correction levels ($2.885/2.89). Dare I say it, ‘Spring’like – but this is shallower than the previous ones occurring since Oct 23 tonow. My theory as to why these others failed is that each time the Spring foundsufficient supply to keep the accumulation going, so they returned to the gameat hand – to get OUR shares.

Anyway,this most recent repeat dive to $2.885 - not much activity at those levels asweak hands had been cleaned out over the proceeding fall from 20 May till nowand this was a retest of previous $2.89 low of a couple of wks ago. They couldn’ttake it lower than $2.885. Falling to $2.885 gave a new data point of correction Wave C (at SuperWave level). It didn’t stay at this price level long as no-one was selling into that level – in fact there were not many selling into any of the lower levels below $2.98 – expensive for those forcing it down – whereas a couple of days prior, $3.01 through $2.99 keep getting reloaded on the sell side. These levels are now showing, IMO, exhaustion. The back-test is done, and the repeat of the back-test is done. More on this later

I note thatthe buy/sell volume dynamics are in transition, or appear to be in transitionover this last TR from start of July. Opening with demand dominant mostmornings, letting demand fill to find supply level, then depressing by loadingsell side to push price low for the day with false recovery tests along the wayto frustrate remaining weak hands. Or variations of the theme. Once they findsupply from the game they latch on to it and milk it and return to that zoneoften for more sustenance. I feel that the demand side is starting to become more dominant, than the supply side, and this is showing through the buy/sell queue volumes.

Back to theFriday repeat back-test, once at unsustainable $2.885 level, a rally started to bring the days SP back up and end with a two wk volume high of 35.5M for the day) – at odds with the previous few wks! So what next - combining - small interday price range, small intraday price range, narrowing volumes, changing buy/sell dynamic – it looks like a setup for something? IMO it’s still waiting for the compelling event to launch markup to claim profit from the 12-18 mth programme. Supply volumes drying up?, so effort vs reward is gaining pressure on the effort side. I still think the compelling event is the commodity price which is still languishing (by design?? who knows – but that will burst at some stage). They will want return on their investment at some stage, the interest alone on 636M shorts must be a headache, let alone the cost of cover of those, but profit will be taken sooner or later, they are lucky having such deep and patient pockets. Greed is a wondrous thing!

I would notbe surprised if we have in the short-term another bull trap setup with thecoming Quarter Report being the feed for that to bring new blood in, then afall back to current levels or another level to wait for the Annual Report inend August. It’s almost like they are dallying around waiting to the commodity price to go ka-bang! as accumulation must be about complete going by the programme time length, and indicators above. Who knows, not I said the fly!

Good luckall, whatever you are doing to get over Winter, or wherever you are not havingWinter.

Haveenjoyed some of the posts over the last few mths, but must admit that theIGNORE button continues to get a work out. Once again, apologies for formatting– HC doesn’t like Word pastes.

Please takewhatever is in the above with a big grain of salt, its prattle material only ona cold windy and wet night. If you’re not partial to salt, take it with youfavourite liqueur – its far more palatable - and enjoy.