RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

We introduced the prospect of a broader peak/reversal-threat in 29-Mar’s Technical Webcast following that day’s bearish divergence in short-term momentum, acknowledging at the time that proof of larger-degree weakness remained required to threaten the secular bull.  Today’s break below 01-Apr’s 441.9 Globex day-session low satisfies this longer-term proof of weakness by confirming a bearish divergence in WEEKLY momentum that breaks the major uptrend from Oct’21’s 322.1 low.  This resumption of late-Mar’s sell-off leaves 20-Apr’s 467.4 high in its wake as the latest smaller-degree corrective high this market is now minimally required to recoup to threaten a new bearish count, render the sell-off from 25-Mar’s 484.6 high a 3-wave and thus corrective affair and re-expose the secular bull trend.  Per such, 467.4 is considered our new short-term risk parameter from which a bearish policy and exposure can be objectively based and managed by shorter-term traders.

Today’s bearish divergence in WEEKLY momentum below 01-Apr’s 441.9 low allows us to conclude 25-Mar’s 484.6 as the END of a major 5-wave Elliott sequence up from Oct’21’s 322.1 low as labeled in the daily log chart above and weekly log chart below.  Combined with a stratospherically high 97% reading in our RJO Bullish Sentiment Index of the hot Managed Money positions reportable to the CFTC, the technical trifecta typical of major peak/reversal environments is in place and now warns of a correction or reversal lower that could be major in scope.  If this call is wrong, all the market has to do is recoup at least 467.4 and certainly 484.6.  Until and unless such strength is proven, traders are urged to prepare for potentially precipitous losses straight away.

If the three key technical factors mentioned above- momentum, sentiment and Elliott-  weren’t enough with respect to a major peak/reversal threat, the monthly log chart below shows the market’s recent proximity to the upper-quarter of its historical range that has repelled all previous assaults.

These issues considered, traders are advised to move to a new bearish policy and exposure from at-the-market (438.7) OB with a recovery above 467.4 required to negate this specific call and warrant its cover.  In lieu of such strength, further and possibly protracted losses straight away should not surprise.

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