Posted on Apr 27, 2023, 08:31 by Dave Toth

Given the extent and 5-wave impulsive of Apr-Jul 2022’s downtrend that warned that that slide might only be the INITIAL (A- or 1st-Wave) of a major peak/reversal process, in 17Oct22’s Technical Blog we discussed the long-term bearish prospect that Jul-Oct’s extensive recovery attempt was just a (B- or 2nd-Wave) correction within that major peak/reversal process.  Today’s break below 10-Mar’s 5.97 low in the Jul contract reinforces that count and defines 03-Apr’s 6.46 Globex day-session high as the minimum level this market now must recoup to threaten it.  Per such, we’re identifying 6.46 as our new long-term bear risk parameter pertinent to longer-term commercial players.

On a very long-term scale, the monthly log active-continuation chart above shows this massive, multi-quarter peak/reversal process that arguably has been unfolding since May’21’s 7.35 high where the start of the bull slowdown process began.  Along with understandably stratospheric sentiment/contrary opinion levels as well as the market’s proximity to its historical highs from 2012, we’ve discussed the likelihood of a major peak/reversal process similar is scope to that that began from Jun’11’s 8.00 high and resulted in the next secular 8-YEAR bear market, the brunt of which unfolded quickly and violently that really took hold, punishingly, in APRIL 2013.

The weekly log active-continuation chart below shows last summer’s low at 5.62 in the Dec’22 contract.  that day’s low in the Jul23 contract was 5.72.  This 5.72-to-5.62-area is the last bastion of support, the break of which exposes NO levels of any technical merit below it and will confirm the massive multi-quarter peak/reversal count.

Finally, on a very short-term basis, the hourly chart of Globex day-session prices does not yet reflect overnight’s break below 13-Mar’s 5.98 low.  But with prices trading around 5.94 currently, we can identify yesterday’s 6.10 high as the absolute smallest-degree corrective high this market is minimally required to recoup to even defer, let alone threaten the major bear.  Per such, we’re defining 6.10 as our new short-term risk parameter pertinent to shorter-term traders with tighter risk profiles.

These issues considered, a bearish policy and exposure remain advised with recoveries above at least 6.10 and especially 6.46 required for short- and longer-term traders to take defensive measures.  In lieu of such strength, the trend is down on all practical scales and should not surprise by its continuance or acceleration straight away.

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