Overnight’s relapse below Mon’s 1.4996 low in the now-prompt May contract renders the past week’s recovery attempt a 3-wave affair as labeled in the 240-min chart below.  Left unaltered by a recovery above yesterday’s 1.5428 high, this 3-wave bounce is considered another correction within the developing downtrend from 30-Dec’s high.  Per such 1.5428 is considered our new short-term risk parameter from which a continued bearish policy and exposure can be objectively rebased and managed by shorter-term traders with tighter risk profiles.

This tight but objective risk parameter at 1.5428 may come in handy given the developing PPOTENTIAL for a bullish divergence in momentum shown in the daily log close-only chart above.  On this close-only basis the market has broken 14-Mar’s 1.4989 low but there’s still a full day of trading for the market to stay below that former low.  On an intra-day basis 14-Mar’s 1.4858 low remains to be broken.  But we believe such a sub-1.4858 break is only a matter of when, not if, and will expose an area between that low and last Nov’s 1.3737 low shown in the weekly log active-continuation chart below that is totally devoid of any technical levels of merit.  If something broader to the bear side still lies ahead, the bear will have every opportunity in the world to “perform” below 1.4858.  Its failure to do so with a recovery above 1.5428 would threaten any broader bearish count, expose this quarter’s setback as just another correction like we saw in Jun-Aug and Oct-Nov last year and re-expose our long-term bullish count.

Indeed, we would remind traders of the past YEAR’S recovery that has, in fact, broken the secular bear trend from Apr’11’s 3.3247 high to 21Jan16’s 0.8538 low shown in the monthly log scale chart below.  On this very long-term scale a commensurately larger-degree momentum failure below Nov’14’s 1.3737 corrective low remains required to break the uptrend from last year’s low.  Until such weakness is proven, it would be premature to conclude the current quarter’s slide is NOT a bull market correction.

These issues considered, a bearish policy remains advised with strength above 1.5428 minimally required to defer or threaten this call to the point of non-bearish action like short-covers and cautious bullish punts.  In lieu of such strength further and possibly accelerated losses remain expected.