RJO FuturesCast

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The extent of yesterday and today’s clear, impulsive demolishing of 02-Jun’s 114.92 initial counter-trend low confirms our major peak/reversal suspicions most recently updated in 17-Jun’s Technical Webcast.  The 240-min chart above shows that this resumed and accelerated weakness leaves smaller- and larger-degree corrective highs in its wake at 119.80 and 126.00, respectively, that the market must now recoup to threaten and then negate a bearish count that, for additional reasons we’ll discuss below, could be major in scope.  Per such, these levels represent our new short- and long-term risk parameters from which a bearish policy and exposure can be objectively rebased and managed.

In the daily log chart below, the sell-off from 17-May’s 133.79 high, THUS FAR, is only a 3-wave affair, suggesting an alternate bullish count that would content the current decline from 10-Jun’s 126.00 high is the completing C-Wave to a major BULL market correction.  But until and unless this market arrests this clear and present downtrend with a countering bullish divergence in momentum and/or recovers above at least 119.80, we urge traders to bias towards a wave count that is WITH the downtrend and that contends the decline from 126.00 is the dramatic 3rd-Wave of a major reversal lower.  This prospective 3rd-Wave from 126.00 wouldn’t meet a typical 1.618 progression of May’s 133.79 – 114.92 suspected 1st-Wave until the 98.50-area!

Contributing elements to this major peak/reversal count include:

  • today’s bearish divergence in WEEKLY momentum below 08-Mar’s 115.37 major corrective low shown in the weekly log chart above amidst
  • historically frothy sentiment/contrary opinion levels
  • an arguably complete and massive 5-wave Elliott sequence up from Apr’20’s 48.35 low as labeled above, and
  • the market’s total rejection thus far of the upper-quarter of its historical range on a monthly log scale basis below.

Per the above technical facts and observations, this peak/reversal environment could be massive in scope and span QUARTERS ahead and to levels indeterminately lower.  Per such, a full and aggressive bearish policy and exposure remain advised with a recovery above 119.80 minimally required to defer or threaten this call and warrant defensive measures.  In lieu of such strength, further and possibly steep, accelerated weakness straight away should not surprise.

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