RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

While the market hasn’t taken out 09-Nov’s rogue 3668 all-time high yet, we believe overnight’s break above last week’s 3655 high reaffirms and reinstates the secular bull market.  The important by-product of this resumed strength is the market’s definition of recent corrective lows at 3592 and 3542 that we’d fully expect the market to not only sustains recent gains above, but to also start to ACCELERATE higher to “break away” from the past few weeks’ rising-wedge behavior.  Weakness below 3592 and especially 3542 will not only be inconsistent with this more aggressive bullish count, but could expose a peak/reversal threat that could become more uncomfortable than anyone would like.

The daily chart above shows the market clearly above and thus far holding above key former resistance-turned-support from the 3540-to-3580-area.  The trend is up on all scales and should not surprise by its continuance or acceleration.  The threat of a developing bearish divergence in momentum is also clear, BUT this will only come into play IF/when CONFIRMED below 3542.  Such sub-3542 weakness will break Nov’s uptrend and expose at least a correction of this portion of the bull from 30-Oct’s 3225 low to whatever high is left in the wake of such a mo failure.  With the market, in effect, establishing new all-time highs with NO levels of any technical merit above it, the sky’s the limit.

On a long-term basis, 24-Se’s 3198 remains intact as our key long-term risk parameter.  Per any broader bullish count, the market shouldn’t be able to come anywhere near this pivotal level.  If/when it does, it’d be time to neutralize any/all bullish equity exposure.

These issues considered, a full and aggressive bullish policy and exposure remain advised with a failure below 3592 the first micro indication of a problem that would warrant paring or neutralizing bullish exposure by short-term traders.  Subsequent weakness below 3542 would confirm the next iterative level of weakness and vulnerability that would require short-term traders to neutralize any remaining bullish exposure and warrant even long-term players to pare exposure.  In lieu of weakness below these specific levels and risk parameters, further and possibly accelerated gains straight away are expected.

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