RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

The 240-min chart below shows yesterday’s break below last Thur’s 19.51 initial counter-trend low that confirms a bearish divergence in short-term momentum.  This mo failure defines 17-May’s 20.24 high as the end of the recovery attempt from 12-May’s 18.30 low and an objective risk parameter from which non-bullish decisions like long-covers and bearish punts can be objectively based and managed.  The fact that this mo failure stems from the upper-quarter of the past couple months’ range in the Jul contract as well as the past NINE MONTH range on an active-continuation basis would seem to reinforce this call.

The daily chart above and weekly log active-continuation chart show the market’s recent proximity to the upper-quarter of its broader lateral range.  COMBINED with yesterday’s bearish divergence in short-term momentum and still-frothy bullish sentiment/contrary opinion levels, we believe this market is now vulnerable to at least another intra-range swoon and possibly a major peak/reversal threat.

These issues considered, traders are advised to establish a bearish policy and exposure at-the-market (19.66) with a recovery above 202.4 negating this specific count and warranting it immediate cover.  In lieu of such 20.24+ strength and especially on resumed weakness below yesterday’s 19.45 low, further and possibly accelerated losses are anticipated straight away.

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