RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

The market’s recovery this morning above last week’s 2.9025 smaller-degree corrective high confirms a bullish divergence in momentum that defines Thur’s 2.7690 low as not only one of developing importance, but the end of a 3-wave sell-off attempt from 13-Jul’s 2.9930 high.  Left unaltered by a relapse below 2.7690, this 3-wave decline is considered a (4th-Wave) corrective/consolidative affair that warns of a (5th-Wave) resumption Mar-Jul’s major uptrend that preceded it.  Per such, this 2.7690 level becomes our new long-term risk parameter from which long-term players can objectively rebase and manage the risk of a still-advised bullish policy.

The market’s position in the middle of the past month’s range presents poor risk/reward merits from which t initiate directional exposure by shorter-term traders whipsawed out of bullish exposure following 04-Aug’s bearish divergence in short-term mo.  Another intra-range relapse below roughly the 2.84-handle-area, stemmed by another bullish divergence in short-term mo would present a preferred risk/reward buying opportunity.  Until then, a neutral/sideline policy is advised.

On a broader scale, only a glance at the daily log scale chart below is needed to see the very labored nature to the past month’s sell-off attempt that, on the heels of Jun-Jul’s accelerated (and suspected 3rd-Wave) rally, has (4th-Wave) correction/consolidation written all over it.  The Fibonacci fact that this shallow sell-off attempt stalled within a few hundredths of a penny of the Fibonacci minimum (2.7681) 23.6% retrace of Apr-Jul’s suspected 3rd-Wave rally from 2.1495 to 2.9930 would seem to reinforce this bullish count that now calls for a 5th-Wave resumption of the bull to new highs above 2.9930.

The return to historically frothy heights in our RJO Bullish Sentiment Index and the market’s position still deep within the middle-half bowels of its massive historical lateral range remain intact as threats to the clear and present uptrend.  But today’s recovery lends some clarity to the past month’s frustrating lateral chop from a longer-term perspective and warns of at least another round of new highs and, most importantly, a specific and objective failure below 2.7690 to negate this count.

These issues considered, a bullish policy remains advised for long-term players with a failure below 2.7690 required to negate this call and warrant its immediate cover.  Shorter-term traders are advised to wait for an intra-range setback for a preferred risk/reward buying opportunity as current prices in the middle of the past month’s range presents poor risk/reward merits.

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