RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Today’s decisive break below the past week’s 172.08-area support in the now-prompt Dec contract reaffirms our bearish count introduced in 25-Aug’s Trading Strategies Blog and leaves Thur’s 172.76 high in its wake as the latest smaller-degree corrective high this market is now minimally required to recoup to threaten this count calling for further and possibly steep losses.  In this regard, this 172.76 level serves as our new short-term risk parameter from which a still-advised bearish policy and exposure can be objectively rebased and managed.

The daily close-only chart of the Dec contract (above) shows peak/reversal behavior that now has a month’s worth of price action behind it.  Given the magnitude of May-Aug’s broader rally, we cannot rule out the possibility that this month-long setback is just a (4th-Wave) correction until the market breaks 11-Jun’s 170.13 (prospective 1st-Wave) high needed to nullify the impulsive integrity of such a bullish count.  But as we’ve been discussing since early-Aug, the market’s poke into the upper-quarter of the massive TWO YEAR lateral range posed a threat to the bull.  That threat grew to the point of confirmation with 25-Aug’s bearish divergence in momentum exposing a peak/reversal count that could be major in scope.  Until this market can recover above at least 172.76, that peak/reversal count remains intact and warns of potentially steep losses.

The weekly active-continuation chart below shows this week’s roll from Sep to Dec as the prompt contract.  What lies below is anyone’s guess at this juncture, but at least the intermediate-term trend and possibly the new long-term trend is clearly down with a recovery above at least 172.76 required to threaten this call enough to warrant moving to the sidelines.  Per such, a bearish policy and recommended shorts from 176.00 OB in the Sep contract rolled into Dec remain advised with a recovery above 172.76 required to warrant taking profits and moving to the sidelines.  In lieu of such strength, further and possibly significant losses remain expected.

RJO Market Insights

RJO Market Insights specializes in forward-thinking analysis, focused on potential market-moving events and dominant factors driving price discovery. Detailed fundamental and technical coverage across multiple commodity sectors is combined with objectively-constructed trade recommendations to provide an industry-leading product for R.J. O’Brien’s Institutional clients, commercial hedgers, introducing brokers and individual investors free of charge. Content is distributed in both text and audio formats, with specialized service offerings provided by account type.
For more information on RJO Market Insights, contact your broker or RJO representative.