RJO FuturesCast

Daily Futures Market News, Commentary, & Insight


In Wed’s Technical Webcast we identified Mon’s 50.22 smaller-degree corrective high as our short-term risk parameter the market needed to sustain losses below to maintain a more immediate bearish count.  After delving into the lower-48-handle yesterday morning and failing to sustain sub-49.00-area losses overnight, emphasis remains on this 50.22 level as an admittedly tight but objective risk parameter around which traders are advised to toggle short-to-intermediate-term directional biases and positions.

The market’s failure to sustain sub-50.22 levels will confirm a bullish divergence in momentum and define yesterday’s 48.20 low as the END of a textbook 5-wave Elliott decline from 12-Apr’s 54.14 high and a new short-term risk parameter from which non-bearish decisions like short-covers and cautious bullish punts can then be objectively based and managed.  Moreover, this 5-wave decline could be the completing C-Wave of a major bull market correction from -3-Jan’s 55.24 high that, if correct, would re-expose the 14-month uptrend to eventual new highs above 55.25, something that would shock a world that’s been acting on the premise that it’s awash in so much crude that it doesn’t know what to do with.

Crude Light 240 min Chart


Crude Light Daily Chart

The daily (above) and weekly log (below) charts show the market’s precarious position at the lower extreme of this year’s generally lateral range bounded by 03-Jan’s 55.24 high and 22-Mar’s 47.01 low and 61.8% retrace of Nov-Jan’s 42.20 – 55.24-portion of last year’s major uptrend.  Support “down here” is to be expected, with a recovery above our 50.22 short-term risk parameter needed to arrest this month’s slide and expose at least another intra-range pop OR a resumption of the major uptrend from Feb’16’s 26.05 low.

Against the backdrop of 2016’s major uptrend, this year’s mere lateral price action THUS FAR is advised to first be approached as a corrective/consolidative affair ahead of an eventual resumption of the bull to potentially extensive gains above 55.25.  IF, alternatively, the non-uptrending price action from the Jan high is part of a broader PEAK/reversal environment, then somewhere along the line the bear’s gotta man-up and start behaving like one with trendy, impulsive, sustained losses below a key level like 22-Mar’s 47.01 low and long-term risk parameter.

Either the fundamental assessment of the world’s oil glut is correct and this market “should” be collapsing OR, technically, the market “knows something else” that the consensus doesn’t and it’s merely toying with everyone with this year’s bull market consolidation before it resumes to 55.25+ levels.  We believe this long-term bull-vs-bear debate toggles around the 47.00-mark with near-term strength above 50.22 the next smaller-degree evidence that reinforces a broader bullish count.

Crude Light Weekly Chart


Traders are reminded that the first-half of 2016’s rally BROKE the secular bear trend down from at least May’11’s 114.83 high, exposing a major correction or reversal higher.  We’ve discussed this oodles of times since introducing a major base/reversal count in 18Feb16’s Technical Blog.  On this long-term basis the market has yet to provide the evidence to diffuse this call for continued long-term gains that we believe could eventually reach the 65-to-80-range.  A failure below at least 47.00 and preferably last Nov’s 42.20 corrective low remains required to threaten or negate this long-term bullish call.

These issues considered, a cautious bearish policy remains OK for shorter-term traders with a recovery above 50.22 negating this call and exposing at least another intra-55-to-47-range rebound and possibly a resumption of the 14-month bull that would warrant a move to a cautious bullish stance.  Longer-term players remain advised to maintain a cautious bullish policy with a failure below 47.00 required to negate this call and warrant defensive steps.  Near-term strength above 50.22 would also be cause for longer-term players to increase their bullish exposure.

Crude Light Monthly Chart




The technical construct for heating oil is virtually identical to that detailed above in crude oil with Tue’s1.5567 smaller-degree corrective high defining our short-term risk parameter and point around which shorter-term traders are advised to toggle directional biases and positions.  Conversely, 27-Mar’s 1.4910 larger-degree corrective low remains as our long-term risk parameter around which long-term players are advised to toggle directional biases and exposure.

NY Gasoline 240 min Chart


NY Gasoline Daily Chart

NY Gasoline Weekly Chart

NY Gasoline Monthly Chart

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