Thur’s recovery above 14-Apr’s 144.78 high and our short-term risk parameter nullified the bearish divergence in short-term momentum discussed in 22-Apr’s Technical Blog, chalked up the sell-off attempt from 144.78 to 25-Apr’s 132.33 low as another correction and reinstated the secular bull market. This resumed bull defines this 132.22 low as the latest larger-degree corrective low the market is now minimally required to fail below to confirm a bearish divergence in momentum of a scale sufficient to threaten the secular bull trend. In this regard, this level serves as our new long-term risk parameter from which longer-term commercial players can objectively rebase and manage the risk of a bullish policy and exposure.
On a smaller scale detailed in the 240-min chart above, Fri’s 144.44 low is an exceptionally tight level, the failure below which will render it an initial counter-trend low and confirm a bearish divergence in very short-term momentum that would be pertinent to shorter-term traders with tighter risk profiles. This 144.44 low and area of former resistance-turned-support suffices as an objective short-term risk parameter for shorter-term traders, but it is acknowledged that such a tight risk parameter would be prone to whipsaw risk against the backdrop of the secular bull trend. There is just nothing in the way of an objective and practical short-term risk parameter between 144.44 and 132.33 in our opinion.
From a very long-term perspective shown in the weekly (above) and monthly (below) log scale charts, the magnitude of the secular bull market is clear. Threats to the bull include its engagement of the upper-quarter of its historical lateral range and understandably historically extreme bullish sentiment. But traders are reminded that sentiment/contrary opinion is not an applicable technical tool in the absence of an accompanying confirmed bearish divergence in momentum needed to even defer, let alone threaten the clear and present and major uptrend. Herein lies the importance of 25-Apr’s 132.33 corrective low and key risk parameter.
These issues considered, a bullish policy and exposure remain advised for longer-term players with a failure below 132.33 required to threaten this call enough to warrant neutralizing exposure. Shorter-term traders with tighter risk profiles whipsawed out of bullish exposure following 22-Apr’s bearish divergence in short-term momentum have been advised to reinstate a cautious bullish policy on Thur’s recovery above 144.78 with a minimum failure below 144.44 required to threaten this specific short-term call and warrant its cover. In lieu of a relapse below at least 144.44 and preferably below 132.22, further and possibly accelerated gains are once again expected.