RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

On the smallest of scales, last Thur’s slip below a very minor corrective low at 19.94 from 11-Apr confirms a bearish divergence in very short-term momentum.  This mini mo failure defines 13-Apr’s 20.46 high as one of developing importance and a mini risk parameter from which very short-term traders can objectively base non-bullish decisions like long-covers and cautious bearish punts.  Clearly and obviously, a recovery above 20.46 nullifies this mini divergence, chalks up the setback as another correction and reinstates the secular bull trend in the now-prompt Jul contract.

From a longer-term perspective however, the mini momentum failure discussed above is of too small a scale to conclude anything more than another correction within the major uptrend with former 1956-to-1950-area resistance considered new near-term support ahead of a continuation of the major bull.  MINIMALLY, we believe a break below28-Mar’s 19.50 suspected minor 1st-Wave high is required to jeopardize the impulsive integrity of a 5-wave Elliott sequence up from 16-Mar’s 18.44 larger-degree corrective low and expose a broader peak/reversal threat.  Per such, this 19.50 is considered our short-term risk parameter from which a still-advised bullish policy and exposure can be objectively based and managed by most and certainly longer-term traders.

From an even longer-term perspective however, commensurately larger-degree weakness below that 18.44 larger-degree corrective low from 16-Mar is required to conclude the end to a major 5-wave sequence up from 03-Feb’s 17.36 low and resurrect a peak/correction/reversal environment that could be major in scope.

While the secular bull trend remains arguably intact basis the Jul22 contract, long-term players are reminded of the major peak/reversal-threat elements that remain intact until and unless the market breaks 18Nov21’s 20.69 high on a weekly, log, active-continuation basis below:

  • late-Nov’s confirmed bearish divergence in WEEKLY momentum amidst
  • historically frothy sentiment levels (that persist today), and
  • an arguably compete and massive 5-wave Elliott sequence that dates from Apr’20’s 9.21 low.

Until negated by a break above 20.69 in the now-prompt Jul contract, and especially if the Jul contract starts failing below 19.50 and then certainly 18.44, traders need to be aware of these broader peak/reversal-threat elements.  These issues considered, a bullish policy and exposure remain advised for all but the shortest-term traders with a failure below 19.50 required to pare or neutralize exposure commensurate with one’s personal risk profile.  In lieu of such weakness, a continuation of the secular bull trend in the Jul contract is anticipated.  Very short-term traders are OK to move to a neutral-to-cautiously-bearish policy with a recovery above 20.46 required to negate this call and warrant its immediate cover.

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