Posted on Jan 18, 2024, 07:27 by Dave Toth

With this week’s break below 31May23’s 215.25 low, the weekly log active-continuation chart below shows the market’s reinstatement and reaffirmation of the 20-month secular bear market from May’22’s 437.50 all-time high.  While we’ll discuss prospective support around the “200-area” below, the continuance or acceleration of this clear and present and major downtrend straight away should hardly come as a surprise with strength above a number of corrective highs left in the wake of this major bear required to defer, threaten and ultimate break this downtrend.

Moving back even further to a monthly log active-continuation basis, the chart below shows the major reversal of 2019 – 2022’s secular bull market and encroachment on the 200-to-150-area that saw a ton of price action between 2014 and 2020 that is considered a major support candidate, especially given the prospect that the market may be in the completing 5th-Wave stage of a major Elliott sequence down from 437.50.  Nonetheless, PROOF of strength above prior corrective highs remains required to confirm a bullish divergence in momentum needed to, in fact, break the clear and present and major downtrend.

Drilling down to a daily perspective of the Mar contract, the chart below shows the clear and present downtrend from 24-Jul’s 269.75 high and 06-Dec’s 234.75 larger-degree corrective high this market is required to recoup to break this downtrend.  Per such, this level remains intact as our key longer-term bear risk parameter pertinent to longer-term commercial players.

Drilling down even further, the hourly chart below shows the past few weeks’ orderly, stair-stepping continuation of the bear with corrective highs left at 224.50 and 218.75.  This perspective shows the market’s acknowledgement of former support-turned-resistance levels that it now must recoup to even defer, let alone threaten the broader bear trend.  Per such, 224.50 and 218.75 are considered our new short-term and mini parameters from which shorter-term traders can objectively rebase and manage the risk of a still-advised bearish policy and exposure.  And given the magnitude of the secular bear market, a recovery above 224.50 would only allow us to conclude the end of the portion of the secular bear from 06-Dec’s 234.75 larger-degree corrective high, nothing more, nothing less.

These issues considered, a bearish policy and exposure remain advised with a recovery above 218.75 and/or 224.50 required for shorter-term traders to pare or neutralize exposure and commensurately larger-degree strength above 234.75 required for longer-term commercial players to follow suit.  In lieu of such strength, further and possibly accelerated losses straight away remain anticipated.

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