From a long-term perspective the weekly log scale chart of the Feb contract clearly shows the dominant trend to be up with former 1.52-to-1.46-range resistance a key new support candidate. If there is a place to beware the end or bottom of the latest bull market correction, we believe it will be from this range.
A threat to a more immediate bullish count is the currently historically frothy 82% reading in our proprietary RJO Bullish Sentiment Index of the hot Managed Money positions reportable to the CFTC. At 82% reflecting 81K longs to just 18K shorts, it's not hard to find fuel for downside vulnerability. So something's gotta give: either this former 1.52-to-1.46-range prospective support or a reward for the preponderance of Managed Money bulls.
After a clear 5-wave rally from Nov's low to either 29-Dec's 1.6798 high close or 03-Jan's 1.7095 intra-day high, we confirmed a correction or reversal lower count following 09-Jan's bearish divergence in momentum discussed in that day's Technical Blog. Against the backdrop of the long-term uptrend, our bias remains one of first approaching this relapse as a correction within the secular uptrend. And thus far the market's proximity to a Fibonacci minimum 38.2% retrace of Nov-Dec's rally leaves this market well within the bounds of a bull market correction. These daily charts also show the market thus far holding ABOVE former 1.52-handle-area resistance-turned-support from late-Oct.