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Latest Sugar Pop Reaffirms Major Base/Reversal Count

Posted 01/13/2020 8:10AM CT | RJO Market Insights

Fri’s explosive bust-out above the past month’s 13.67-to-13.79-area resistance reaffirms our major base/reversal count introduced in 24Sep19’s Technical Blog and leaves smaller- and larger-degree corrective lows in its wake at 13.40 and 13.10, respectively, that remain intact as our short- and longer-term risk parameters from which a still-advised bullish policy and exposure can be objectively based and managed.  Former 13.80-area resistance would be expected to hold as new near-term support heading forward, although we doubt this market should come anywhere near this area at this point following the extent and impulsiveness of Fri’s rally.

The weekly log active-continuation chart above shows the market’s proximity to 24Oct18’s 14.24 high that has served as the upper boundary of the past 17-month lateral range.  If there’s a level and condition to be aware of as a threat to a major base/correction/reversal count, it is this 14.24 high.  But herein lies the importance of the short- and longer-term risk parameters identified above.  Until and unless the market proves weakness below these levels, the trend is up an all practical scales and should not surprise by its continuance or acceleration.  A breakout above 14.24 would only be the latest and perhaps last affirmation of a base/correction/reversal to AT LEAST Sep’16-to-Aug’18’s bear trend from 24.10 to 9.91.  The market’s upside potential above 14.24 is indeterminable and potentially extreme.

These issues considered, a full and aggressive bullish policy and exposure remain advised with a failure below at least 13.40 required to pare or neutralize exposure.  In lieu of such weakness, further and possibly accelerated gains remain expected.

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