Today’s break above last week’s 76.67 high and our mini risk parameter resulting from Thur’s bearish divergence in very short-term momentum reaffirms the secular bull trend and leaves Thur’s 73.14 low in its wake as the latest smaller-degree corrective low this market is now required to sustain gains above to maintain a more immediate bullish count.  Given today’s continuation of the massive bull trend that began 18 MONTHS ago from 6.50 and highest levels since Nov 2014, it is incumbent on the bull to continue to behave like one with sustained, trendy, impulsive gains required to maintain a more immediate bullish count “up here” where even an admittedly short-term momentum failure below a corrective low like 73.14 could expose long-term downside implications.  Per such, we’re identifying 73.14 as our new short-term but critical risk parameter from which both short- and long-term traders are advised to rebase and manage the risk of a bullish policy and exposure.

This tighter but objective risk parameter at 73.14 may come in handy given no levels of any practical use below 73.14 shy of 23-Aug’s 61.74 larger-degree corrective low needed to, in fact, break the secular bull trend.  If we’re supposed to be long “up here”- and we are since the trend is up on all scales- then it’s imperative for the bull to continue to sustained trendy, impulsive price action higher to maintain the risk/reward merits of such a bullish policy.  Of course, a failure below 73.14 would NOT be anywhere near the scale required to conclude the end of the secular bull trend.  But with understandably insane bullish sentiment levels, the unknown risk below 73.14 and extent to which this market might then be vulnerable to weakness would certainly defer or threaten the risk/reward metrics of a bullish policy and exposure from 77.00+ levels.

Indeed, the current 66% reading in the Bullish Consensus ( is the highest in over 10 YEARS and, at 87% reflecting 352K Managed Money long positions to just 54K shorts, our RJO Bullish Sentiment Index shows plenty of fuel for downside vulnerability.  This said, traders are reminded that sentiment/contrary opinion is not an applicable technical tool in the absence of a confirmed bearish divergence in momentum needed to even defer, let alone threaten the clear and present and major uptrend.  And herein lies the importance of even an admittedly smaller-degree corrective low like 73.14.

Lastly, the monthly chart below shows today’s break above 06-Jul’s 76.98 high and Occt’18’s 76.90 high that reaffirms the secular bull trend and establishes the highest prices for crude oil since Oct/Nov’14’s collapse.  There are NO levels of any technical merit above the market shy of Aug’13’s 112.24 high.  The only levels of any technical merit currently are those lying BELOW the market in the forms of former resistance-turned-support like the 76-handle-area and prior corrective lows like 73.14 and 61.74.  In lieu of weakness below at least 73.14, the trend is up on all scales with no resistance above it whatsoever ahead of further and possibly accelerated gains straight away.  Per such, a bullish policy and exposure are advised with a failure below 73.14 required to defer or threaten this call enough to warrant moving to a neutral/sideline position.

RJO Market Insights

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