RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Today’s break below last week’s 4.779 low reaffirms our major peak/reversal count introduced in 07-Sep’s Technical Webcast and leaves yesterday’s 5.245 high in its wake as the latest smaller-degree corrective high this market is now minimally required to recoup to even defer, let alone threaten this bearish count and policy.  This 5.245 level is also in the immediate area of former 5.256 support from 06-Dec that, since broken last week, is considered a new near0-term resistance candidate.  Per such, we’re defining 5.245 as our new short-term risk parameter from which shorter-term traders with tighter risk profiles can objectively rebase and manage the risk of a still-advised bearish policy and exposure.

On a broader scale, only a glance at the daily log scale chart above of the now-prompt Feb contract is needed to see that the trend is down on all scales, having now lost over 50% of its value from its 23-Aug high of 9.582.  On this broader scale and as a direct result of the extent of this month’s portion of the meltdown, commensurately larger-degree strength above 13-Dec’s 6.871 larger-degree corrective high remains required to break the downtrend from even 23-Nov’s 7.907 high, let alone threaten this year’s major reversal from Aug’s 9.582 high. 

While the major downtrend has been reaffirmed and reinstated, we advise shorter-term traders to move to a more conservative approach to risk assumption ”down here” where the weekly log close-only chart below of the most-active futures contract shows the market having reached the (4.690) 38.2% retrace of 2020 – 2022’s entire 1.548 – 9.305 rally.  This merely derived Fibonacci relationships is NOT considered support, but rather only an “area of interest” around which to beware the requisite bullish divergence in momentum needed to defer or threaten the clear and present downtrend.  Herein lies our rationale for tightening bear risk to yesterday’s 5.245 smaller-degree corrective high.  Until and unless this market recoups AT LEAST 5.245, the trend is down on all scales and should not surprise by its continuance or acceleration straight away.

These issues considered, a bearish policy and exposure remain advised with a recovery above 5.245 required for shorter-term traders to take profits and move to the sidelines and commensurately larger-degree strength above 6.871 for longer-term commercial players to follow suit.  In lieu of a recovery above at least 5.245, the trend is down on all scales and is expected to continue and possibly accelerate.

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