Yesterday and overnight’s impulsive break above both 03-Jun’s 100.75 corrective high in the then-prompt Jul contract and that day’s 102.40 high in the now-prompt Sep contact confirms the bullish divergence in DAILY momentum that breaks the downtrend from at least 08-May’s 113.15 high and reinforces our major base/reversal count introduced in 24-Jun’s Trading Strategies Blog. This resumed strength clearly reinforces 15-Jun’s 94.55 low as one of developing importance and a short-term but key risk parameter from which non-bearish decisions like short-covers and bullish punts can be objectively based and managed.
On a larger scale, former support from late-Apr between roughly 104.00 and 106.00, depending on which contract (Jul or Sep), remains intact as a potentially significant resistance candidate, so we’re marking the 105.00-area as our key longer-term risk parameter and threshold the market needs to recoup to arguably break the downtrend from 26-Mar’s 130.65 high.
Contributing mightily to this base/reversal count that could be major in scope is the market’s rejection thus far of the lower-quarter of the past year’s range amidst historically bearish sentiment levels that warned of and accompanied both major recoveries from Oct’19’s 92.20 low and May’19’s 87.60 low. COMBINED with the bullish divergence in daily momentum, completed wave count and Fibonacci progression relationship at 94.55, we believe a unique and compelling risk/reward opportunity remains from the bull side. These issues considered, a bullish policy and longs recommended from 98.70 OB remain advised with a failure below 94.55 required to negate this call and warrant its cover. In lieu of such weakness, further and possibly accelerated gains are expected, with the 104-to-106-range the next key resistant threshold. Above 106, we think this market could fly to 115+ levels and possibly to the upper-quarter of the past year’s range above 126.