RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Posted on Dec 01, 2022, 10:56 by Dave Toth

Today’s clear break below 21-Nov’s 69.18 initial counter-trend low reaffirms our peak/reversal count introduced in 16-Nov’s Trading Strategies Blog and leaves key highs in its wake at 74.46 and especially 75.94 that this market must now recoup to threaten and then negate this call.  Per such, these levels represent our new short- and long-term risk parameters from which new a bearish policy and exposure can be objectively rebased and managed.

On a broader scale, the technical elements that contribute to a peak/reversal threat that could be major in scope include:

  • 16-Nov’s bearish divergence in momentum from
  • the extreme upper recesses of this year’s range amidst
  • historically extreme levels in our RJO Bullish Sentiment Index, and now
  • the market working on an “outside WEEK down”.

Both the daily (above) and weekly (below) log scale charts show the market engaging key former resistance-turned-support around the mid-67-handle-area.  IF IF IF the past three weeks is a correction within a broader BULL market, then thus area HAS to hold as new support.  Much below this area- say to the 65-handle- will render Jul-Nov’s entire recovery from 54.29 a 3-wave and thus corrective affair that would expose a sharp relapse to the lower recesses of this year’s range and possibly a resumption of Jun-Jul’s decline to new lows below 54.29.  And given the extent to which the Managed Money community has its neck sticking out on the bull side, fuel for downside vulnerability is in ample supply.

These issues considered, a bearish policy and shorts recommended on a scale up from 72.75-to-74.35 remain advised with a recovery above 74.46 required to defer or threaten this call enough to warrant its cover.  In lieu of such strength, further and possibly protracted losses straight away remain expected.

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