Posted on Jun 30, 2023, 07:35 by Dave Toth

With only one remaining support level- 24-Mar’s 75.70 low on an active-continuation basis- preventing a possible run at last year’s 70.21 low, this market has once again rejected the lower recesses of its incessant 7-MONTH lateral range and now looks poised to revert to the middle-half bowels of this black hole range after failing to sustain this week’s losses below former 78.45-to-79.05-area support-turned-resistance and recovering above our mini bear risk parameter at 79.35 discussed in Wed’s Technical Webcast.  While further strength above 20-Jun’s 81.20 next larger-degree corrective high remains required to truly threaten May-Jun’s downtrend and resurrect a broader bullish count, yesterday and overnight’s recovery suffices in defining Tue’s 76.81 low as one of developing importance and a mini risk parameter from which traders can objectively base non-bearish decisions like short-covers and cautious bullish punts.

The daily log chart of the Dec contract shows this week’s break to new lows for the entire sell-off attempt from this year’s 26-Jan high at 86.98, giving this contract free reign to free fall.  Yet, on an active-continuation basis, the chart below shows 24-Mar’s 75.70 low that this market apparently or obviously continues to acknowledge as the lower boundary of the incessant range that has dominated this market since Nov’22’s 89.92 high.

Both these charts show this market’s continued gross inability to sustain a move either way.  Now, as a result of today’s bullish divergence in very short-term momentum from the extreme lower recesses of this 7-month range, we should hardly be surprised by yet another reversion to this range’s middle-half bowels.  On a longer-term basis however, the longer this market trades sideways within this range, the greater the odds become, we believe, that this 7-month range is a corrective/consolidative event that warns of an eventual resumption of Oct-Nov’22’s initial counter-trend uptrend that preceded it.  This could mean prices above the 86.98-to-89.92 highs and resistance that have capped this market for months.  Can we conclude such a longer-term bull move from today’s short-term weakness?  Of course not.  However, we CAN conclude Tue’s 76.81 low as an objective risk parameter from which to bet on a reversal higher of indeterminable scope that could include such a longer-term bullish count.

ON an even broader scale, the weekly log close-only chart of the Dec contract below shows this year’s lateral chop that, on the heels of Oct-Jan’s spike, is easily seen as corrective/consolidative.  Until/unless this market relapses below at least 76.81 and especially 75.70, traders are advised to position for yet another directional flip higher that could produce significant gains, especially with the Bullish Consensus ( measure of market sentiment/contrary opinion still at historically bearish levels.

These issues considered, traders have been advised to neutralize bearish exposure and are further advised to consider new cautious bullish exposure with a failure below 76.81 required to negate this reversal call and warrant its cover.  In lieu of such sub-76.81 weakness, further and possibly surprising gains are anticipated.

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