RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

This morning’s recovery above Thur’s 171.18 corrective high and our short-term risk parameter discussed in Fri’s Technical Blog confirms a bullish divergence in short-term momentum that defines Thur’s 167.52 low as the END of a textbook 5-wave Elliott sequence down from 09-Mar’s 179.31 high as labeled in the 240-min chart below.  Per such, this 167.52 low serves as our new short-term risk parameter from which non-bearish decisions like short-covers and cautious bullish punts can now be objectively based and managed.

Given the magnitude of the secular bull market that this month’s relapse arguably breaks, as well as the extent and uninterrupted steepness of this month’s 179.31 – 167.52 relapse, we are anticipating a more “extensive” corrective recovery in the weeks ahead.  Under such circumstances, a more “extensive” retracement of 61.8% (174.81) or more would not be unusual.  And we cannot rule out a resumption of the secular bull to new highs above 179.31 either.

The daily chart of the Jun contract above shows the market’s rejection of the 30Dec19’s previous contract low at 167.82, but we’re not sure of the technical relevance of this.  What we think IS relevant is today’s accompanying bullish divergence in momentum to the market’s rejection of the (167.37) 50% retrace of the portion of the secular bull trend from Mar’18’s 156.22 low to Mar’20’s 179.31 high shown in the weekly log scale active-continuation chart below.  Combined with a complete 5-wave sequence down from 179.31, we believe at least a significant corrective rebound has begun and will span at least a few weeks and to the 174.80-area or higher.

These issues considered, all previously recommended bearish exposure has been advised to be covered.  Traders are furthermore advised to first approach setback attempts to 169.00 levels or lower as corrective buying opportunities with a failure below 167.52 required to negate this call, warrant its immediate cover and reinstate the bear.  In lieu of such sub-167.52 weakness, we anticipate a multi-week rebound that could be extensive and to the upper-174-handle or higher.

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