RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Fri and overnight’s break above 20-Apr’s 1.2094 high reaffirms at least the intermediate-term bull trend and our bullish count introduced in 07-Apr’s Technical Webcast.  The important by-product of this continued strength is the market’s definition of Thur’s 1.2006 low as the latest smaller-degree corrective low it is now required to fail below to confirm a bearish divergence in momentum needed to break Apr’s uptrend and expose at least an intermediate-term correction of the rally from 31-Mart’s 1.1721 low.  In lieu of such sub-1.2006 weakness, at least the intermediate-term trend remains up and should not surprise by its continuance.  Per such, this 1.2006 level serves as our new short-term risk parameter from which traders can rebase and manage the risk of a still-advised bullish policy and exposure.

While this month’s recovery has not been unimpressive and cannot be ignored as the resumption of Mar’20 – Jan’21’s major uptrend following a clear 3-wave and thus corrective setback from 06-Jan’s 1.2368 high to 31-Mar’s pivotal 1.1721 low, our short-term risk parameter at 1.2006 may come in handy given the market’s proximity to the (1.2121) 61.8% retrace of Jan-Mar’s 1.2368 – 1.1721 decline.  For while 1Q21’s sell-off attempt clearly looks like a 3-wave and thus corrective affair that requires a break of 31-Mar’s 1.1721 low and key longer-term risk parameter to mitigate, we cannot conclude that that 1.1721 low COMPLETED the correction as opposed to just defined its lower boundary ahead of further lateral consolidation between 1.2368 and 1.1721 that could span months.  IF this latter, deferred-bullish count is what the market has in mind, a short-term momentum failure below 1.2006 would constitute the initial signal.  If 31-Mar’s 1.1721 low and exact 38.2% retrace of Mar’20 – Jan’21’s 1.0671 – 1.2368 COMPLETED the correction that now re-exposes the major bull trend, we should expected sustained, trendy, impulsive behavior higher that does NOT produce any weakness below corrective lows like 1.2006.

These issues considered, a bullish policy and exposure remain advised with a failure below 1.2006 required to pare or neutralize bullish exposure commensurate with one’s personal risk profile, with 1.1721 the key risk parameter pertinent to longer-term institutional players.  In lieu of weakness below at least 1.2006, further and possibly accelerated gains should not surprise.

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