Sugar Poised to Resume Year-long Bull, FINALLY

September 16, 2016 8:27AM CDT

After screwin' around in lateral, choppy range for 2-1/2-months, the past couple days' strength and today's break above 24-Aug's 20.94 high reinforces our suspicions that this merely lateral chop is corrective/consolidative ahead of an eventual break above 30-Jun's 21.22 high needed to reinstate the past year's major bull.  The 240-min chart below details this recent strength that leaves Wed's 20.05 low in its wake as the latest smaller-degree corrective low and new short-term risk parameter the market now is required to fail below to defer or threaten our bullish count.  In this regard 20.05 is considered our new short-term risk parameter from which still-advised bullish exposure can be objectively rebased and managed.

Sugar 240 min

 

Sugar Daily

While the market has been mired in this consolidation range, there hasn't been much new to discuss or update as trying to call all the twists and turns of a consolidative mess is an exercise in futility.  Indeed, such corrective environments are full of aimless whipsaw risk that just a fact of trading life.  Today's strength reinforces our long-term bullish call from 05-Aug's Technical Blog following 04-Aug's bullish divergence in momentum that stemmed the Jun-Jul sell-off attempt and defined 29-Jul's 18.71 low as our long-term risk parameter the market needed to break to negate this bullish count.  This key low remains intact as that risk parameter the market is required to break to negate a count calling for a continuation of the past YEAR'S major uptrend shown in the weekly log scale chart below.

Sugar Weekly

 

The monthly log chart below shows the major reversal of the 2011 - 2015 bear market remaining arguably intact.  Understandably, our proprietary RJO Bullish Sentiment Index of the hot Managed Money positions reportable to the CFTC remains historically high and frothy and typical of major PEAK/reversal environments.  But traders are reminded that sentiment is not an applicable technical tool in the absence of a confirmed bearish divergence in momentum of a scale sufficient to break the major uptrend.  Herein lies the importance of that 18.71 long-term risk parameter.  In lieu of such weakness further and possibly accelerated gains to new highs above 21.22 are anticipated straight away.

In sum, a full bullish policy is advised for both short- and long-term traders with weakness below at least 20.05 required to threaten this count and warrant paring or neutralizing bullish exposure commensurate with one's personal risk profile.  In lieu of such weakness further and possibly accelerated gains are expected straight away.

Sugar Monthly

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