RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

The extent and impulsiveness of today’s bust-out above 21-Dec’s 1912 high reinforces our resumed bullish policy discussed in 17-Dec’s Technical Webcast and leaves smaller- and larger-degree corrective lows in it wake at 1893.8 and 1859, respectively.  These are the levels the market must now fail below to threaten and then negate a more immediate bullish count.  Per such, they represent our new short- and longer-term risk parameters from which a still-advised but cautious bullish policy and exposure can be objectively rebased and managed.

From a longer-term perspective, it’s hard to get too aggressive or complacent with a bullish policy because the market remains well within the throes of the 2089 – 1767-range that has constrained it since Aug.  The past month’s recovery easily falls within the confines of a (B- or 2nd-Wave) corrective rebuttal to Aug-Nov’s sell-off within a still-arguable major peak/correction/reversal process.  This said, we don’t want to short-change the what would be an extraordinary bullish count that suggests Aug-Nov’s 3-wave-looking sell-off is a complete and major (4th-Wave) correction within the secular bull market that’s gearing up to resume to eventual new all-time highs above 2089.

If the long-term bullish count is correct, then somewhere along the line this market needs to BEHAVE LIKE A BULL with sustained, trendy, impulsive and increasingly obvious price action higher.  Today’s price is exactly this type of evidence.  The market just needs to 1) keep on providing this behavior and, most importantly, 2) not fail below recent corrective low like 1859 and even smaller-degree ones like 1893.8.

On a much broader scale shown in the weekly log chart above and monthly log chart below, Aug-Nov’s sell-off attempt falls well within the bounds of a mere correction relative to the magnitude of the secular bull trend.  This is not in dispute in any way.  But again, if the secular bull to 2089+ is resuming, the bull needs to behave like one with sustained, trendy price action higher.

Market sentiment/contrary opinion levels are far off their frothy highs from spring-thru-summer last year that warned of a correction or reversal lower.  These indicators are not seen as an impediment to a resumed secular bull.

In sum, a cautious bullish policy and exposure remain advised with a failure below 1893.8 required to shorter-term traders to move to the sidelines.  Commensurately larger-degree weakness below 1859 is required for longer-term players to follow suit.  In lieu of such weakness, further and possibly accelerated gains should not surprise.

MAR SILVER

For most intents and circumstances, the technical construct and expectations for silver are identical to those detailed above for gold with 31-Dec’s 26.345 smaller-degree corrective low and 23-Dec’s 25.185 larger-degree corrective low serving as our new short- and longer-term risk parameters to a still-advised bullish policy and exposure.  In lieu of such weakness, further and possibly accelerated gains should not surprise.  Former upper-26-handle-area resistance is considered new near-term support.

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