Yesterday and today’s break above Wed’s 5.330 high reaffirms the rally from 30-Dec’s low and leaves yesterday’s 5.063 low in its wake as the latest smaller-degree corrective low this market is now minimally required to fail below to threaten a bullish count enough to warrant defensive measures by shorter-term traders with tighter risk profiles. Per such, we’re identifying this 5.063 level as our new short-term risk parameter from which shorter-term traders with tighter risk profiles can objectively rebase and manage the risk of a still-advised bullish policy and exposure.
Basis the Apr contract, both the daily chart above and weekly log chart below show the trend is up on all scales with commensurately larger-degree weakness below 09-Mar’s 4.450 larger-degree corrective low required to break the broader uptrend from 30-Dec’s 3.384 low. This 4.450 level remains intact as our key long-term risk parameter pertinent to the risk profile of longer-term commercial players. This said, paring bullish exposure to more conservative levels on an admittedly short-term mo failure below our short-term risk parameter at 5.063 provides longer-term players to acknowledge and accept whipsaw risk (back above whatever high is left in the wake of a sub-5.063 failure) in exchange for deeper nominal risk below 4.450.
On an active-continuation basis however, the weekly (above) and monthly (below) log scale charts show last Oct’s 6.466 high and resistance still intact as THE key long-term risk parameter this market is still required to break to confirm Oct-Dec’21’s setback as a (4th-Wave) correction and reinstate the secular bull market that dates from Jul’20’s 1.517 low. The market’s proximity to last year’s high on this active-continuation basis cannot be ignored as a precarious one and places a high emphasis on MOMENTUM. If there’s a time and place for the prospective (B- or 2nd-Wave) correction to peak, it is here and now and we will gauge such a prospect by a bearish divergence in momentum needed to arrest the clear and present uptrend. If, alternative, the rally form the Dec’21 low is the major 5th-Wave of a resuming secular bull market, then we would expect the market to continue to sustain trendy, impulsive behavior higher up through last year’s 6.466 high without an intervening bearish divergence in momentum. Herein lies the importance of even shorter-term corrective lows and risk parameters like 5.063.
These issues considered, a bullish policy and exposure remain advised with a failure below 5.063 required to defer or threaten this call enough for shorter-term traders to move to the sidelines and for even longer-term players to pare bullish exposure to more conservative levels. In lieu of such weakness, further and possibly accelerated gains should not surprise.