Overnight’s break below the past few days’ 119.09-area support reaffirms our bearish count and leaves yesterday’s 119.19 high in its wake as the latest smaller-degree corrective high the market is now minimally required to recoup to stem the slide with a confirmed bullish divergence in momentum. In lieu of such 119.19+ strength at least the intermediate-term trend remains down and should bot surprise by its continuance or acceleration. Per such traders are advised to trail protective buy-stops to 119.20 on shorts recommended at 120.17 OB in the then-prompt Sep contract in 27-Aug’s Trading Strategies Blog.
This tight but objective risk parameter at 119.19 may come in handy given the market’s encroachment on the lower-quarter of the 121.12-to-118.10-range that has dominated/constrained most of this year’s price action. This said, against the backdrop of a secular bear trend from Jul’16’s 134.075 high that we believe could span a generation, there’s no way to know at this junction that 22-Aug’s 120.24 high and key longer-term risk parameter didn’t COMPLETE another bear market correction ahead of a resumption of the secular bear to new lows below 118.10.
We will certainly be on high alert for any bullish divergence in shorter-term momentum from the (sub-119.02) lower-quarter of this year’s range that would likely expose another intra-range rebound of indeterminable scope and warrant the cover of currently-advised bearish policy and exposure. In lieu of such a sell-off stemming mo failure further and possibly accelerated losses should not surprise. In sum, a bearish policy and exposure remain advised with a recovery above 119.19 required to threaten this cal enough to warrant its cover.