Hi bk,

Don't really have a time frame as most of the stuff I use projects price on any given time - more an expression of energy than projection of time.  But, let's use some of the work of some of the great minds before us to investigate it a bit.  If you use Gann's and Doctor Andrew's work regarding doubling the range, using 3. 46 as roughly the center, and the highs as your stretch, you land somewhere just above 2.50 on a strictly horizontal basis.  If you look at the recent price action, we returned to roughly 3.40 from 3.01 - coming up a bit week from broken 3.46 from below.  Was the the Andrew's Zoom/Retest of a ML?  Maybe - and that again points lower prices.

Think about last year....what happened.  We went vertical up and vertical down, and struck lows around 3.46 on the August report.  We then recovered nicely retesting 4.00 - or about a 50% retracement.  We then remained range bound on the continuous charts, but all the contract charts continued to make new lows.  To me this is because the front month chart controls the rest, and the spreads are just an expression of that energy.  So when each contract rolled off, the following contracts got sucked down to resume the path of the continuous where it's predecessor left off.  So the horizontal range bound action was effectively the slow grind lower - only it happened on the deferred contracts and not front month.   And those that were holding for a rally likely only experienced basis improvement and not futures price improvement until the lows were struck.  And when the lows were struck, the basis improvement evaporated during the rally.

Comparatively, this year we went up, failed - pure and simple, and rolled through 3.46 like it didn't exist.  Entered the August report, and got the "key reversal" happy dance bar that got everybody thinking it was the low, and then what?  Two weeks later, new lows...significant ones.  Ultimately trading to 3.01.  We then rallied about 40 cents off the lows or roughly 28% the down move.  If that is it, it was pathetic.  To me,  I watch these retracements to measure how much energy the market has.  Last years, was about the same size in net change, but percentage wise much higher.  If there is more energy in the bounce, it will generally lead to less steep decline than a weak bounce will.  Hence, if this years "dead cat" only bounced a meager .40 from the lows,  it hasn't got much energy.  So last year, we bounced significantly - and like we have said before. Every action has a reaction. If it cannot do it on the "Y" axis, it will on the "X" axis - hence deeper relative pullback and horizontal price action following - with the deferred contracts making new lows.  So unless there is some major force that overrides this theory, what could we expect from a "thud" in price?  Likely not horizontal, but instead a grind - in this case lower because that is where the projections lead. 

I am reluctant to put out prices because most of what I use are sloped, so a 3.00 today might be 3.10 next month, 3.20 the next and so on - and everybody remembers a level that was never reached but forgets those that are.  And you never know, something might come along that suggests something different, but using broad brush strokes, "Z" 's market structure supports price to 2.80 or so.  Continuous isn't too far from that.- both sloped.  Big picture stuff gets you much lower than that, more in line with the previously mentioned work Gann. What is important isn't so much the what the low price is, but how we get there, and how long can you store it for.  If "Z" cannot get there, "H" will attempt, then "K", until time and price catch up, or a failure occurs. A painful grind down with basis improvement may not lead to a better price....but there are alot of different way for that to be dealt with.  But never fear, price will rally again. It's already in the making.

Take Care