The market's gross failure yesterday to sustain last week's losses below the prior 2-1/2-weeks' support ranging from 317 to 314 in the now-prompt Mar contract defines last Fri's 311.0 low as one of not only developing importance, but the END of a 3-wave sell-off attempt from 28-Nov's 331.7 high labeled in the hourly chart below. Left unaltered by a relapse below 311.0, this 3-wave sell-off attempt is considered a corrective/consolidative structure that warns of a resumption of Sep-Nov's uptrend that preceded it. In this regard 311.0 is considered our new key risk parameter from which short- and long-term traders can objectively rebase and manage the risk of a bullish policy.
The market's current position in the middle of the past month's 331.7 - 311.0-range leaves it prone to aimless whipsaw risk typical of such range-center conditions. But until and unless this market weakens below 311.0, the past month's relapse attempt is considered a corrective/consolidative affair that warns of an eventual resumption of Sep-Nov's initial counter-trend rally and new highs above 331.7. We believe this evidence reinforces our long-term count introduced in 20-Oct's Technical Blog that contends 27-Sep's low is the end of a (B- or 2nd-Wave) correction Feb-Jun's impressive rally as part of a BASE/reversal environment that could be major in scope.
As we've discussed since late-Oct, the combination of a bullish divergence in WEEKLY momentum amidst historically bearish sentiment levels is a powerful one that warns of a major base/reversal-threat environment. Thus far and especially after yesterday's impressive rebound stemmed the past month's sell-off attempt, the market has yet to provide any technical evidence to refute this broader bullish count. A relapse below 311.0 is needed to do so as a result of yesterday's recovery. In lieu of such sub-311.0 weakness traders are advised to maintain a bullish policy and exposure in expectation of a resumption of Sep-Nov's uptrend to eventual new and potentially significant highs above 331.7. This said, the market's position in the middle of the past month's range exposes it to aimless whipsaw risk for the time being and probably until early-Jan's key crop reports.