Today’s break above 18-Mar’s 94.25 high in the now-prompt Jun contract reinforces our base/reversal count introduced in 18-Mar’s Trading Strategies Blog and leaves last week’s 85.25 low in its wake as the end of a suspected 5-wave Elliott sequence down from 10-Jan’s 119.075 high.  Today’s rally also identifies Fri’s 88.125 low as the latest smaller-degree corrective low the market is now minimally required to fail below to render this recover attempt a 3-wave and thus corrective affair that would then re-expose the major downtrend.  Per such, we are defining 88.10 and 85.25 as our new short- and longer-term risk parameters from which to base and manage a new bullish policy and exposure.

On a much broader basis, the weekly (above) and monthly (below) log scale charts show the market “only” back to the 96-handle-area that provided huge support for years and, since broken earlier this month, must be approached as an equally important new resistance candidate.  A clear break above this area would be the next reinforcing step for a major base/reversal count.  Nonetheless:

  • the market’s recent proximity to the extreme lower recesses of its historical range amidst
  • historically bearish sentiment levels and
  • today’s bullish divergence in daily momentum

contribute to a base/reversal count and opportunity that could be extraordinary.  These issues considered, a bullish policy and exposure from 100.85 OB in the Apr contract now rolled into Jun recommended in 18-Mar’s Trading Strategies Blog remains advised with a relapse below at least 88.10 and preferably 85.25 required to pare or neutralize exposure commensurate with one’s personal risk profile.  In lieu of such weakness, further and possibly longer-term gains back to at least the middle-half (110ish) of the past few years’ range should not surprise.

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