RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Metals

Gold Confirms Massive Base/Reversal Count

Posted 06/20/2019 8:04AM CT | RJO Market Insights

AUG GOLD

Gold Weekly Chart

With today’s impulsive spike above not only this year’s 20-Feb high at 1349.8, but also Apr’18’s 1369.4 high AND Jul’16’s 1377.5 high, the market has confirmed our major base/reversal count that dates from 03Dec15’s 1045.4 low.  This count was resurrected following 02Oct18’s recovery above 1208 discussed in that day’s Technical Blog that identified Aug’18’s 1167.1 low as the prospective end to a B- or 2nd-Wave correction down from Jul16’s 1377 high within a multi-year base/reversal process.

This long-term base/reversal count remains predicated on the combination of:

  • Feb’16’s bullish divergence in MONTHLY momentum introduced in 11Feb16’s Technical Blog
  • 14-year lows in market sentiment/contrary opinion and
  • a complete 5-wave Elliott sequence down from Sep’11’s 1920 all-time high.

With today’s break above Jul’16’s 1377 high, the market has reaffirmed this major, multi-year correction or reversal of the 2011 – 2015 decline from 1920 to 1045.  Furthermore, breaking above the past THREE YEARS’ resistance at 1377 exposes a vast area totally devoid of any technical levels of merit.  In effect, there is no resistance.  The only levels of any technical pertinence now exist only below the market in the forms of former resistance-turned-support like the 1377-to-1362-area and prior corrective lows like 1344.8 and 1323.6.

Gold Monthly Chart

Gold Daily Chart

The daily log scale chart above and 240-min chart below detail the accelerated nature of this resumed major bull trend that shows recent smaller- and larger-degree corrective lows at 1344.8 and 1323.6 that now serve as our new short- and longer-term risk parameters from which a still-advised bullish policy and exposure can be objectively rebased and managed.  The market’s upside potential is indeterminable and potentially extreme with a failure below at least 1344.8 required to threaten this call.

In sum, a full and aggressive bullish policy remains advised with a failure below 1344.8 required to defer or threaten this call enough to warrant paring or neutralizing exposure.  In lieu of such weakness further and possibly protracted gains are anticipated straight away.

Gold 240 Min Chart

 

SEP SILVER

Today’s impulsive breakout above 07-Jun’s 15.15 high and our recent short-term risk parameter following 10-Jun’s bearish divergence in short-term momentum discussed in that day’s Technical Blog obviously nullifies that bearish divergence in mo, chalks up Jun’s relapse attempt as a labored correction and reinstates the broader base/reversal count from 28-May’s 14.265 low.  The important by-product of this resumed strength is the market’s definition of recent smaller- and larger-degree corrective lows at 14.905 and 14.775 that now serve as our new short- and long-term risk parameters from which a bullish policy and exposure can be objectively rebased and managed. Former 15.15-to-15.08-area resistance is expected to hold as a new key support candidate.

Silver 240 Min Chart

 

Silver Daily Chart

Today’s resumed strength above 07-Jun’s 15.15 initial counter-trend high exposes the new long-term trend as up.  Still within the bowels of a 7-month range between 13.86 and 16.19, we can’t totally ignore the prospect that the past month’s recovery is just another intra-range corrective hiccup.  But until and unless this market weakness below at least 17-Jun’s 14.755 larger-degree corrective low and key risk parameter, we also cannot ignore the same type of multi-year BASE/reversal-threat described above in gold that would suggest the market is still in the embryonic stage of a potentially explosive rally to the upper recesses of the 3-1/2-year range.  If such a bullish count is what the market has in store, it would be expected to exhibit sustained, impulsive price action higher straight away, never coming close to the past week’s corrective lows.

Silver Weekly Chart

 

Indeed, the combination of:

  • today’s follow-up to 05-Jun’s bullish divergence in daily momentum from
  • the extreme lower recesses of the 3-1/2-YEAR range amidst
  • historically bearish sentiment/contrary opinion levels and
  • a 3-wave and thus corrective sequence down from 20-Feb’s 16.195 high

is a unique, compelling and powerful one that warns of protracted impulsive gains straight away.  Following Dec’15 – Jul’16’s rally that, in fact, broke the secular bear trend from Ar’11’s 49.82 high and surviving a severe retest of Dec’15’s 13.62 low, at least a continuation of a major corrective/consolidative structure between 13.62 and 21.225 should not surprise in the weeks and perhaps even months or quarters ahead.

These issues considered, a bullish policy and exposure remain advised for long-term players with a failure below 14.755 required to threaten this call enough to warrant its cover.  Shorter-term traders whipsawed out of bullish exposure following 10-Jun’s momentum failure are advised to return to a bullish policy and first approach setback attempts to 15.20 OB as corrective buying opportunities with a failure below 14.905 required to negate this specific call and warrant its cover.  In lieu of such weakness, further and possibly protracted gains straight away should not surprise.

Silver Monthly 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.