RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

We’re not in the habit of getting picayune with direction from the middle-halves of ranges where the risk/reward merits of doing so are poor. And only a glance at the daily and weekly charts is needed to see that the market is in the middle of the past couple months’ range that’s in the middle of the past couple YEARS’ range. Flip a coin.

Euro Bund Sep '18 Daily Chart

Euro Bund Weekly Chart

A cautious bearish policy remains advised as a result of 23-Jul’s bearish divergence in short-term momentum discussed in that day’s Technical Blog. A recovery above 20-Jul’s 163.39 high and short-term risk parameter remains required to negate this call. In lieu of such 163.39+ strength a return to the lower-quarter of the past couple months’ range remains expected or perhaps even a resumption of the 2-year secular bear trend.

What’s interesting to us from a very, very short-term perspective that might interest scalpers and/or those looking to micro-manage longer-term exposure in exchange for whipsaw risk is waning downside momentum and the market’s rejection thus far of a pair of Fibonacci relationships around 160.90 detailed in the 240-min chart below. 160.91 is the 38.2% retrace of Jun-Jul’s 159.37 – 163.39 rally while 160.90 is the 1.000 progression of Jul 20/23’s initial 163.39 – 161.82 slip from 25-Jul’s 162.47 high that forms only a 3-wave decline from that 163.39 high thus far. Left unaltered by a relapse below Wed’s 160.86 low, this 3-wave slip is arguably a corrective/consolidative event that warns of a resumption of Jun-Jul’s rally to new highs above 163.39. Per such, that 160.86 low serves as a micro risk parameter for scalpers looking to place an objective bet on a move above 163.40.

These issues considered, scalpers are advised to take a bullish punt from current 161.58-area prices with a failure below Wed’s 160.86 low negating this call and warranting its cover. A cautious bearish policy remains advised for short- and longer-term traders with strength above 163.39 required to pare or neutralize this exposure commensurate with one’s personal risk profile. A relapse below 160.86 will reinforce this bearish count and run at the 160.00-area of below.

Euro Sep '18 240min 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.