RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

In 27-Mar’s Technical Webcast we discussed the importance of 26-Mar’s 2.9375 low and 21-Mar’s 3.0930 corrective high the market needed to recover above to threaten Dec-Mar’s sell-off attempt and possibly resurrect the secular bull. The market obviously recovered above very short-term corrective highs at 3.0230 and 3.0930 that led to the subsequent gains seen in the 240-min chart below.

While we’re unsure of whether 19-Apr’s 3.1955 high completed only three or five waves up from 26-Mar’s 2.9375 low, this week’s recovery thus far leaves Mon’s 3.0780 low as the end to what to this point is only a 3-wave setback as labeled. Left unaltered by resumed weakness below 3.0780, this 3-wave setback is considered another corrective event within the past month’s uptrend. In this regard this 3.0780 low serves as our new short-term risk parameter from which traders can effectively rebase and manage the risk of bullish exposure.
Copper 240min Chart
This tight but objective risk parameter at 3.0780 may come in handy given the developing potential for a bearish divergence in daily momentum below as well as the market’s position back to the middle of the past 4-month range where we always want to assume an elevated risk of aimless whipsaw risk that warrants a more conservative approach to risk assumption. To be sure, and THUS FAR, Dec-Mar’s sell-off attempt is about as classic a 3-wave, corrective structure as one will find. The prospective C-Wave’s length being virtually identical (i.e. 1.000 progression) to Dec-Feb’s A-Wave decline would seem to reinforce this bull-market-correction count. But that doesn’t mean necessarily that 26-Mar’s 2.9700 low and key long-term risk parameter COMPLETED the correction. Indeed, the prospective consolidation from the Dec high could continue to weeks or months within the range.

IF the correction ended with 26-Mar’s low, then we should expect continued impulsive and increasingly obvious trendy behavior higher. A failure below 3.0780 will be the first short-term evidence against such a more immediate bullish count and warrant paring or neutralizing bullish exposure commensurate with one’s personal risk profile.
Copper Daily Chart
Copper Weekly Chart
From a very long-term perspective the debate continues as to whether 1Q18’s price erosion is merely corrective within the secular bull OR a broader peak/reversal process that could expose significant losses if the market ever relapses below the late-Mar low and range base. The Fibonacci fact that the 2-YEAR bull has thus far stalled at the (3.3267) 61.8% retrace of 2011 – 2016’s secular bear trend is hard to ignore. Conversely, 1Q18’s “only” 3-wave decline, failure to sustain sub-3.0260 losses and return to historically low levels in our RJO Bullish Sentiment Index are clearly factors consistent with a still-developing secular uptrend to eventual new highs above 3.3220.

With objective, market-defined lows and support identified at 3.0780 and certainly 2.9700, a bullish policy and exposure remain advised. A failure below 3.0780 would be cause for shorter-term traders to move to the sidelines and for longer-term players to pare bullish exposure to more conservative levels to lessen or eliminate further intra-range chop of indeterminable scope OR the resumption of a broader peak/reversal threat. In lieu of such weakness further and possibly accelerated gains should not surprise.

Copper Monthly Chart

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