RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Posted on Aug 17, 2022, 08:09 by Dave Toth

Overnight’s break above 26-Jul’s 9.419 high AND 08-Jun’s 9.598 high in the Sep contract as well as that day’s 9.664 high in the then-prompt Jul contract negates our long-term peak/reversal count and reinstates the secular bull market from Jun’20’s 1.517 low.  On a short-term basis, the 240-min chart shows that this resumed strength leaves smaller- and larger-degree corrective lows in its wake at 8.403 and 7.532, respectively, that this market is now fully expected to sustain gains above per a major 5th-wave resumption of this secular bull.  It’s failure to do so will again threaten this bull and warrant non-bullish decisions commensurate with the trader’s personal risk profile.

Former 9.41-to-8.99-area resistance is expected to hold as new near-term support.

As a result of today’s new highs for the 29-month secular bull trend, 05-Jul’s 5.324 major 4th-Wave corrective low is THE level this market now needs to fail below to, in fact, break the secular bull trend.  Even for long-term commercial players however, waiting for or requiring such a 45% decline before taking non-bullish steps is highly impractical.  Herein lies the rationale and benefit of identifying recent corrective lows at 7.532 and even 8.403 as the new bull risk parameters around which to manage the risk of a resumed bullish policy.  Until and unless this market fails below these levels, the trend is up on all scales that should not surprise by its continuance to indeterminately higher levels.  And per such a bullish count, now-former and multi-month resistance from the 9.40-to9.60-area would/should be expected to hold as new key support.

Finally and on an even longer-term basis, the monthly log active-continuation chart below shows the market’s encroachment on the extreme upper recesses of its historical range that has constrained it for the past 30 years.  There is no resistance between spot and 2008’s 13.694 all-time high.  The question and challenge now is whether this secular bull will continue through that all-time high or roll over in another 2008-2009-type major reversal.  As the ONLY technical levels of any merit currently lie BELOW the market in the form of corrective lows at 8.403 and 7.532, traders are advised to return to a bullish policy and exposure on a scale-down from the 9.40-to-9.00 with a failure below 8.403 required for shorter-term traders to neutralize exposure and commensurately lager-degree weakness below 7.532 for longer-term players to follow suit.  In lieu of such weakness, further and possibly accelerated gains should not surprise.

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