RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Softs

Continued Gains Reinforce Major Cocoa Base/Reversal

Posted 10/20/2017 9:21AM CT | RJO Market Insights

The market’s continued gains yesterday above 12-Oct’s 2121 high not only reaffirms the past couple months’ uptrend detailed in the 240-min chart below, but also evidences a base/reversal-threat environment that could be absolutely major in scope on a MONTHLY basis we’ll discuss below.  As a direct result of this latest spate of strength, the chart below clearly shows the market’s definition of Tue’s 2028 low as the latest corrective low the bull is now obligated to sustain gains above to maintain a more immediate bullish count.  Its failure to do so won’t necessarily negate a major base/reversal count, but it’ll certainly defer or threaten it enough to warrant paring or neutralizing bullish exposure in order to circumvent the depths unknown of at least an interim correction and possibly a resumption of the secular bear.  In this regard 2028 becomes our new key risk parameter to a still-advised bullish policy.

Cocoa 240 min Chart

 

The daily log scale chart below shows the developing POTENTIAL for a bearish divergence in the stochastics measure of momentum, but only proof of weakness below Tue’s 2028 corrective low and key risk parameter will CONFIRM the failure to the point of non-bullish action like long-covers.  Until and unless such sub-2028 weakness is proven, the trend is up on all scales and should not surprise by its continuance or acceleration with now-former 2121-to-2090-range resistance considered new support.

 

Cocoa Daily Chart

Cocoa Weekly Chart

The daily log scale chart below shows the developing POTENTIAL for a bearish divergence in the stochastics measure of momentum, but only proof of weakness below Tue’s 2028 corrective low and key risk parameter will CONFIRM the failure to the point of non-bullish action like long-covers.  Until and unless such sub-2028 weakness is proven, the trend is up on all scales and should not surprise by its continuance or acceleration with now-former 2121-to-2090-range resistance considered new support.

Cocoa Monthly 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.