RJO FuturesCast

Daily Futures Market News, Commentary, & Insight


Yesterday’s break of last Thur’s 48.20 low reaffirms the developing downtrend from 12-Apr’s 54.14 high and leaves yesterday’s 49.28 high in its wake as the latest smaller-degree corrective high this market now needs to sustain losses below to maintain a more immediate bearish count.  Per such 49.28 is considered our new short-term risk parameter from which shorter-term traders with tighter risk profiles can effectively rebase and manage the risk of a still advised bearish policy and exposure.

Crude Light 240 Chart


Crude Light Daily Chart

This tight but objective risk parameter may come in very handy given:

  • the market’s position at the extreme lower recesses of this year’s 55.24 – 47.01-range amidst
  • waning downside momentum and
  • a historically bearish 28% reading in the Bullish Consensus (marketvane.net) measure of market sentiment shown in the weekly log scale chart below.

If there’s a time and place to be particularly watchful for this market to base and reverse higher, it is here and now.  By the same token the market is only a stone’s throw away from breaking the absolutely pivotal 47.00-area that certainly threaten our long-term bullish count and expose further and possibly steep losses thereafter as there are NO levels of any technical merit below 22-Mar’s 47.01 low shy of last Nov’s 42.20 low.  This doesn’t mean we’re forecasting a collapse to 42.20 if the 47.00-level gives way, but it certainly does mean that the market’s downside potential would be indeterminable at sub-47.00 levels and potentially extensive until and unless the market proved “non-weakness” above at least 49.28.

Crude Light Weekly Chart


Once again we would remind traders that despite the magnitude of this year’s near-15% decline from 03-Jan’s 55.24 high, this decline still falls well within the bounds of a mere correction of 2016’s whopping 112% rally that arguably remains just the start of a major base/reversal of the secular bear trend from May’11’s 114.83 high to Feb’16’s 26.05 low shown in the monthly log scale chart below.  The recovery has thus far failed around the (54.69) 50% retracement of the near-5-year bear market from 114.83 to 26.05 and could have a lot more weakness and vulnerability ahead of that 47.00-area is broken.  Conversely, a very short-term mo failure above 49.28 could expose one of the great risk/reward buys for the next quarter and beyond.

These issues considered, a cautious bearish policy remains advised for shorter-term traders with strength above 49.28 required to threaten this call enough to warrant moving to the sidelines ahead of a potential return to a bullish policy thereafter.  Long-term players remain OK to maintain a bullish policy with a failure below 47.00 required to move to the sidelines immediately to circumvent the depths unknown of a major correction or reversal lower.

Crude Light Monthly Chart




Similarly, from a short-term perspective detailed in the 240-min chart below, yesterday’s resumed slide defines yesterday’s 1.5097 high as the latest smaller-degree corrective high and new short-term risk parameter this market is minimally required to recoup to threaten a bearish count enough for shorter-term traders to move to the sidelines.  In lieu of at least such strength further and possibly accelerated losses should not surprise.

NY Gasoline 240 min Chart


NY Gasoline Daily Chart

From a long-term perspective and unlike crude oil, diesel has broken its key lows from late-Mar that expose potentially major losses straight away.  Of course, heating oil isn’t going anywhere that crude oil isn’t, so a crude oil recovery above 49.28 will likely result in diesel’s failure to sustain losses below 1.5097 that would expose at least an intermediate-term corrective recovery and possibly a more significant reversal higher.  Until or unless such 1.5097+ strength is shown however, the trend in heating oil is down on all pertinent scales and should not surprise by its continuance or acceleration.

NY Gasoline Weekly Chart




The technical construct and expectations for RBOB are virtually identical to those detailed above in heating oil with 28-Apr’s 1.5879 high considered the latest smaller-degree corrective high and short-term but key risk parameter this market needs to sustain losses below to maintain a more immediate bearish count and policy.  In sum, a bearish policy and exposure remain advised with a recovery above 1.5880 required to negate this call and expose a larger-degree correction or reversal higher.

NY Gasoline 240 min Chart


NY Gasoline Daily Chart

NY Gasoline Weekly Chart

RJO Market Insights

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