RJO FuturesCast

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The peak/reversal threats elements have been in place since we introduced the prospect in 14-May’s Technical Blog.  With today’s break below 21-Jun’s 4.0880 initial counter-trend low confirming a bearish divergence in WEEKLY momentum, the major peak/reversal count is confirmed, exposing downside potential that could be extreme and even relentless straight away.  Historically frothy sentiment/contrary opinion levels since late last year have been complicit in this analysis as has the textbook complete 5-wave Elliott sequence from Mar’20’s 1.9725 low to 10May21’s 4.8880 high labeled in the weekly log chart below.

This week’s reaffirmed weakness leaves 27-Jul’s 4.6275 high in its wake as the key long-term risk parameter the market is required to stem the bear, render the sell-off attempt from 4.8880 a 3-wave and thus corrective affair and re-expose the secular bull.  Until such strength is proven, the decline from that 4.6275 high is considered the 3rd-Wave of a reversal lower that could have MONTHS of meltdown to go.  Even a Fibonacci minimum 38.2% retrace f 2020 – 2021’s rally doesn’t cut across until the 3.45-area.

The market’s gross failure to sustain the secular bull trend above 2011s previous all-time high of 4.6495 and subsequent rejection of that entire area is clear in the monthly log chart below.  Until and unless this market recoups 4.6275, it’s downside potential is indeterminable and potentially severe.

The daily (above) and 240-min (below) charts detail the extent and impulsiveness of the past few weeks’ decline that leaves smaller- and larger-degree corrective highs in its wake at 4.4310 and 4.6275, respectively.  MINIMALLY, as a result of this developing collapse, this market must recoup last Fri’s 4.4310 corrective high to jeopardize the impulsive integrity of a bearish count that we believe has massive downside potential.

These issues considered, a full and aggressive bearish policy and exposure remain advised with a recovery above 4.4310 required to pare or neutralize exposure.  In lieu of such strength or a confirmed bullish divergence in even short-term momentum sometime in the foreseeable future, look out below.

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