The market's recovery this morning above our short-term risk parameter at 144.20 discussed in Thur's Technical Blog confirms a bullish divergence in short-term momentum that defines last Wed's 137.85 low as not only the END of the decline from 29-Jul's 149.65 high, but also the end of a 3-wave affair from 15-Jul's 157.56 high as labeled in the 240-min chart below. Left unaltered by resumed weakness below last week's 137.85 low, this 3-wave decline may be considered a corrective/consolidative structure that warns of a resumption of this year's major uptrend that preceded it. In this very important regard 137.85 is considered our new short-term risk parameter from which all non-bearish decisions like short-covers and cautious bullish punts may now be objectively based and managed.
In addition to Jul-Aug's sell-off attempt thus far unfolding into only a 3-wave affair, the daily log scale close-only chart above shows its rejection of the (138.54) 50% retrace of May-Jul's 123.75 - 155.10-portion of the bull as well as the (138.99) 1.000 progression of mid-Jul's initial 155.10 - 144.20 decline from 29-Jul's 149.50 high. And, if that weren't enough, the weekly log chart below shows the market's rejection of key former 136-handle-area resistance from Mar that was expected to hold as new support IF the recent sell-off attempt was "just" a correction within a broader and still-developing bullish environment.
These issues considered and while acknowledging that a break above our longer-term risk parameter defined by 29-Jul's 149.65 high remains required to CONFIRM Jul-Aug's decline as a 3-wave and thus corrective structure, traders are nonetheless advised to return to a bullish policy and first approach setback attempts to the 143.00-area OB as corrective buying opportunities ahead of a suspected resumption of this year's major uptrend to eventual new highs above 157.56. A failure below 137.85 is required to negate this call.