This morning's break below our short-term risk parameter defined by 20-Oct's 22.35 low negates our resumed bullish call in Mon's Technical Blog and resurrects either a larger-degree correction or possibly a major reversal lower. As a direct result of this resumption of the past MONTH'S slide detailed in the 240-min chart below, the market has identified Mon's 23.32 high as the latest smaller-degree corrective high and new short=term parameter from which the risk of any non-bullish decisions like long-covers and cautious bearish punts can now be objectively based and managed. Former 22.35-to-22.52-range support should now provide resistance if something bigger to the bear side lies ahead.
From a longer-term perspective shown in the daily log chart above and weekly log chart below, the 21.25-areathat capped this market as resistance for 2-1/2-months between late-Jun and mid-Sep remains as a key new support candidate with the still-arguable secular uptrend. However, our proprietary RJO Bullish Sentiment Index remains at historically frothy levels typical of major peak/reversal environments. And now that at least the intermediate-term trend is down and the market has confirmed specific, objective highs and risk parameters above it, market sentiment has become an APPLICABLE technical tool that warns of a vulnerability to lower prices that could be significant.
In sum and while commensurately larger-degree weakness below our long-term risk parameter defined by 01-Sep's 20.10 major corrective low remains required to truly break the major uptrend, both short- and longer-term traders are advised to move to a neutral-to-cautiously-bearish policy as a result of today's short-term failure below 22.35. Strength above 23.32 is required to negate this call and resurrect the secular bull trend.