RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Yesterday and overnight’s continuation of the clear and present uptrend leaves Fri’s 1.3839 low in its wake as the latest smaller-degree corrective low this market is now minimally required to fail below to confirm a bearish divergence in short-term momentum needed to even defer, let alone threaten the rally. In this regard 1.3839 is considered 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 bullish policy.
From a longer-term perspective commensurately larger-degree weakness below 11-Jan’s 1.3458 next larger-degree corrective low is minimally required to break even the portion of the bull from 03Nov17’s 1.3040 low, let alone the year-long bull from 16Jan17’s 1.1988 low shown in the weekly chart below. Per such, 1.3458 is considered our new long-term risk parameter to a bullish policy and exposure for longer-term players. This risk parameter also has the benefit of being below a ton of former resistance from the 1.3550-to-1.3658-range that would be fully expected to hold as new support if the market is still truly strong and warranting a continued bullish policy “up here”.
The past couple weeks’ ACCELERATED gains are coming at a pivotal time and place and have to be considered assets to a longer-term bullish count. For months now we have discussed the general 1.350-to-1.38-area as a key resistance candidate given its strong support for SEVEN YEARS from Jan 2009 until the market’s Jun’16 breakdown. The monthly log scale chart shows the market not only breaking this area, but doing so in an accelerated manner.

Taking this historical analysis a big step further, the quarterly log scale chart below shows that the genera; 1.40-area is a pivotal rate around which this market has toggled for the past 25 YEARS! If there’s an area and time to be watchful for the clear and present uptrend to trouble, it’s still around current levels. And herein lies the importance of identifying specific risk parameters like 1.3458 and even 1.3839 to protect a bullish policy.

These issues considered, a bullish policy and exposure remain advised with weakness below 1.3839 required for shorter-term traders to move to the sidelines and circumvent the depths unknown of another interim corrective dip or more protracted correction lower. A bullish policy remains advised for long-term players as well with a commensurately larger-degree failure below 1.3458 required to take similar defensive action. In lieu of such weakness further and possibly accelerated gains remain expected.


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