This morning’s break below 13-Dec’s 170.75 low reaffirms our bearish count updated in 16-Dec’s Technical Blog and leaves last Mon’s 171.88 high in its wake as the latest smaller-degree corrective high this market is now minimally required to recoup to mitigate a more immediate bearish count and expose a larger-degree correction higher.  Per such, this 171.88 high is considered our new short-term risk parameter from which a bearish policy and exposure can be objectively rebased and managed by shorter-term traders with tighter risk profiles.

Now-former 171.00-area support is considered new near-term weakness ahead of further and possibly protracted weakness straight away.

Basis the now-prompt Mar contract, the daily chart above shows the market establishing new lows for a 4-month downtrend from 15-Aug’s 178.75 high.  On this broader scale, commensurately larger-degree strength above 28-Nov’s 173.61 next larger-degree corrective high remains required to break this 4-month downtrend and expose at least a larger-degree corrective rebuttal and possibly a resumption of the secular bull.

We mention this alternate and very bullish count because we can’t yet totally disregard Sep-Nov’s sell-off attempt from 179.67 to 169.12 as a 3-wave and thus corrective event on a weekly log active-continuation basis below.  Resumed, impulsive, trendy behavior below 08-Nov’s 169.12 low in the then-prompt Dec contract is needed to reaffirm a major slide and expose potentially sharp losses thereafter.  A recovery above our long-term risk parameter defined by 28-Nov’s 173.61 high could be a game-changer and expose what we would believe at that point to be potentially steep, sharp gains in the resumption of the secular bull.  But we can only cross that bridge if/when we get there.  And even the prospect of such a rebound would have to START with a recovery above 23-Dec’s 171.88 smaller-degree corrective high and short-term risk parameter.  Until and unless such 171.88+ strength is shown, there’s no way to know the bottom won’t fall out straight away.

In sum, a bearish policy and exposure remain advised with a recovery above 171.88 required to defer or threaten this call enough to warrant defensive steps commensurate with one’s personal risk profiles.