RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Today’s resumed weakness below the past week’s 1.2842-area support reaffirms our broader correction count introduced in 04-Aug’s Technical Blog and leaves yesterday’s 1.2917 high in its wake as the latest smaller-degree corrective high and new short-term risk parameter the market is required to sustain losses below to maintain a more immediate bearish count.  Former 1.2850-area support is considered new near-term resistance ahead of further and possibly extensive losses.

Pound Index 240 min Chart

Pound Index Daily Chart

The daily chart above shows the market closing in on the (1.2778) 38.2% retrace of Jan-Aug’s 1.1988 – 1.3267 rally (for what that’s worth).  But given that:

  • the market has completed a (textbook) 5-wave Elliott affair as labeled that
  • spanned seven months, 13 figures and over 10% and, most importantly
  • is, at best, only the INITIAL counter-trend attempt against a near-10-year secular bear market

traders should not be surprised at a (B- or 2nd-Wave) correction of this year’s rally that is EXTENSIVE in terms of both price and time.  A three or four month, 61.8% retrace would put this market at or below the 1.2475-area into the Nov-Dec’17 period.  And that path could be a wild, volatile one.

A break below 21-Jun’s larger-degree corrective low at 1.2589 remains required to, in fact, break the 7-month uptrend, but we maintain a bearish policy for both short- and longer-term traders with strength minimally above 1.2917 now required to defer this call and expose an interim corrective pop that traders may want to sidestep by paring or covering bearish exposure above 1.2917.  In lieu of such 1.2917+ strength, further lateral-to-lower prices remain expected in a correction that could still have a couple/three months to go and produce levels below 1.2500.

Pound Index Weekly Chart

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