RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Fri’s break below 11-Sep’s 159.23 low reaffirms our bearish count introduced in 22-Aug’s Technical Blog and leaves 12-Sep’s 159.80 high in its wake as the latest smaller-degree corrective high the market is now minimally required to recoup to arrest the slide and threaten a more immediate bearish count.  Per such this 159.80 high is considered our new short-term risk parameter from which shorter-term traders with tighter risk profiles can objectively rebase and manage the risk of an advised bearish policy and exposure.  Former 159.23-to-159.59-range support is considered new near-term resistance ahead of further and possibly accelerated losses.

Euro 10yr Dec '18 240 Minute Chart


Euro 10Yr Dec '18 Daily Chart

Given the market’s entrapment within the past couple years’ range on a weekly active-continuation chart basis below, and especially as it engages the lower-quarter of this range, the longer-term directional jury remains out as to what this year’s mar-Aug recovery attempt was.  Was it just the start of a bigger correction or reversal high to eventual 164+ levels over the next couple quarters, suggesting this current relapse is a corrective buying opportunity?  Or was it another Nov’16-to-Feb’17-type component of a major bear market correction ahead of eventual new lows below 156?  Longer-term players are urged to acknowledge both possibilities.

What we DO know is this:

  • AT LEAST the intermediate-term trend is down
  • strength above at least 159.80 is required to threaten a call for further and possibly accelerated losses
  • IF the former, bullish count is correct, then the lower-quarter of the past couple years’ range between 159 and 156 would be expected to contain the current corrective sell-off attempt
  • a bullish divergence in momentum from this lower-quarter, even on a minor, intra-day basis is minimally required to stem the slide and increase the odds of the bullish count.

Until and unless the market stems the clear and present intermediate-term downtrend with a confirmed bullish divergence in mo above a prior corrective high, there is no way to know that this month’s portion of the decline from 03-Sep’s 160.98 high isn’t the dramatic 3rd-Wave of an eventual 5-wave Elliott sequence down to the 157-handle or below.

These issues considered, a bearish policy and exposure remain advised with strength above 159.80 required to threaten this call enough for shorter-term traders to move to take profits on shorts and move to the sidelines and for longer-term players to pare bearish exposure to more conservative levels.  In lieu of such 159.80+ strength, further and possibly accelerated losses remain expected.

Euro 10yr Weekly Chart

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.