RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Yesterday’s break above 08-Jul’s 99.39 high reaffirms our interim bullish count and long recommendation from the 99.22-area discussed in 02-Jul’s Trading Strategies Blog and leaves 13-Jul’s 99.225 low in its wake as the latest smaller-degree corrective low this market now needs to sustain gains above to maintain a more immediate bullish count.  Per such, this 99.225 level becomes our new short-term risk parameter from which an interim bullish count and exposure can be objectively rebased and managed.

This said, we will be keeping a very close eye on momentum as the market engages the upper recesses of the past quarter’s 99.125 – 99.51-range where a recovery-stemming bearish divergence in short-term momentum could mean the end of a major 2nd-Wave correction of Aug’20 – Apr’21’s initial 1st-Wave down within a major peak/reversal process.  16-Jun’s bearish divergence in momentum marks 11-Jun’s 99.51 high as one of obvious importance, the break of which could expose extended gains thereafter.  Per such, this 99.51 level serves as our long-term bear risk parameter for longer-term institutional players.

Per this broader 2nd-Wave correction from 05-Apr’s 99.125 low however, that 99.51 resistance does NOT need to hold.  This suspected C-Wave of the correction from 02-Jul’s 99.16 low could break that 99.51 high and remain well within the broader peak/reversal process.  What WILL matter for this suspected completing wave within the correction is a bearish divergence in momentum from the general area around 99.51.  And until such a mo failure stems this recovery, we don’t want to underestimate the market’s upside potential in the event this entire peak/reversal count is wrong and the secular bull resumes to new highs above last year’s 99.79 high.

These issues considered, an interim bullish policy and exposure remain advised with, currently, a failure below 99.225 require to negate this call and warrant its cover.  We anticipate trailing this protective sell-stop however as this recovery slows down around the area of 11-Jun’s 99.51 high and creates the potential for a bearish divergence in shorter-term momentum that we believe will present a more acute and favorable risk/reward opportunity around which traders can reverse into a bearish policy that could have very long-term implications.

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