RJO FuturesCast

Daily Futures Market News, Commentary, & Insight


Overnight’s blast above 27-Mar’s 1.0906 high reinforces our bullish count introduced in 06-Apr’s Trading Strategies Blog and leaves Fri’s 1.0682 low in its wake as the latest smaller-degree corrective low this market is now required to fail below to threaten this bullish count.  In this regard 1.0682 is considered our new short-term risk parameter from which recommended longs from 1.0690 can be objectively rebased and managed.

Euro Index 240 min Chart

Euro Index Daily Chart

The daily log scale chart above shows that as a result of today’s break above late-Mar’s 1.0906 high, the market can look back on nearly four full months of basing behavior AND the exposure of a possible 3rd-wave extension rally from 22-Feb’s 1.0493 low.  Furthermore, we have discussed for months the fact that market sentiment was at historically low, pessimistic levels that contributed to this major base/reversal threat.  And our proprietary RJO Bullish Sentiment Index of the hot Managed Money positions reportable to the CFTC actually WENT DOWN last week to 26% reflecting more new shorts than new longs.  COMBINED with today’s resumption of a near-4-month developing uptrend we believe the market may now be vulnerable to a sharper rally as the market forces the capitulation of this increasingly painful and losing bearish exposure by the huddled consensus.

Euro Index Weekly Chart

Finally, from a very long-term perspective shown in the monthly log scale chart below, we’d like to remind traders of the compelling combination of:

  • late-Jan/early-Feb’s bullish divergence in momentum amidst
  • historically bearish sentiment
  • the market’s failure to sustain losses below prior and key 1.04-handle-area support-turned-resistance and
  • the Fibonacci fact that the bear’s resumption from May’14’s 1.3993 high spanned an identical length (i.e. 1.000 progression) to 2008-2010’s preceding 1.6040 – 1.1876 decline.

As discussed since early-Feb this combination of factors warns of a base/reversal environment that could be major in scope, including the END of the secular bear market from Jul’08’s 1.6040 high.  Today’s rally reinforces this major bullish call and, perhaps more importantly, identifies corrective low and risk parameters at 1.0682 and 1.0569 that this market is now obligated to fail below to threaten or negate this call.  Until and unless such weakness is proven, further and possibly accelerated gains remain expected.

Euro Index Monthly Chart



Dollar Index 240 min Chart


Similarly, today’s break below 27-Mar’s 98.86 low presents an identical but inverted technical construct in the USD Index to that detailed above for the Euro with recent smaller- and larger-degree corrective highs at 100.03 and 101.34 considered our new short- and longer-term risk parameters this market needs to recoup to threaten or negate a call for further and possibly accelerated losses straight away.

Dollar Index Daily

Dollar Index Weekly Chart

Here too, it’s very odd and potentially very opportunistic to note that our RJO Bullish Sentiment Index has risen to its highest, most bullish level since Mar’09 at 90% DESPITE nearly four months of eroding price action since 03-Jan’s 103.82 high.  COMBINED with today’s reaffirmation of this developing peak/reversal/downtrend we believe this gross extent to which the huddled masses have their necks sticking out on the bull side warns of further and possibly steep, relentless losses in the Index straight away.

These issues considered, a bearish policy remains advised with minimum strength above 100.03 required to even defer, let alone threaten this call and warrant defensive measures.  In lieu of at least such 100.03+ strength further and possibly accelerated losses remain expected straight away.

Dollar Index Quarterly Chart


RJO Market Insights

RJO Market Insights specializes in forward-thinking analysis, focused on potential market-moving events and dominant factors driving price discovery. Detailed fundamental and technical coverage across multiple commodity sectors is combined with objectively-constructed trade recommendations to provide an industry-leading product for R.J. O’Brien’s Institutional clients, commercial hedgers, introducing brokers and individual investors free of charge. Content is distributed in both text and audio formats, with specialized service offerings provided by account type.
For more information on RJO Market Insights, contact your broker or RJO representative.