RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

This morning’s break above Mon’s 2.1119 high reaffirms the secular bull trend and leaves yesterday’s 2.0202 low in its wake as the latest smaller-degree corrective low this market is now minimally required to fail below to break even the past couple weeks’ portion of the bull from 02-Mar’s 1.9063 low, let alone threaten the major bull trend.  Per such, this 2.0202 low serves 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 bullish policy and exposure.

From a geeky Elliott Wave perspective, the prospect that yesterday/today’s resumed rally could be the completing 5th-Wave of a sequence up from 02-Mar’s 1.9063 next larger-degree corrective low certainly pops out, and that the rally from that 1.9063 low could be the completing wave of a much more massive 5-wave sequence from 02Nov20’s 1.1184 low basis the Apr contract.  Amidst waning upside momentum and historically frothy levels in the Bullish Consensus (marketvane.net), it is increasingly important and incumbent on the bull to sustain trendy, impulsive behavior higher.  Its failure to do so, first below 2.0202 and then, on a broader scale, below 1.9063 will warn of and then confirm the end of the major uptrend from at least early-Nov’s low and the start of a correction or reversal lower that could be major in scope.  Until and unless the market fails below these specific and objective bull risk parameters, the trend is up on all scales and should not surprise by its continuance or acceleration.

The weekly log active-continuation chart below shows the magnitude of the secular bull trend and its engagement of a major resistance candidate from 2019 and 2018 around the 2.10-to-2.28-area as well as the historically frothy levels in the Bullish Consensus not seen since 2Q19 that warned of and accompanied that major peak/reversal environment.  It’s not hard to find peak/reversal-threat elements, but for these elements to become applicable, the market’s got to do one simple thing:  break the clear and present and major uptrend with a confirmed bearish divergence in MOMENTUM.  Until and unless such a mo failure is confirmed, the technical construct that has dominated this market for months remains intact and should hardly surprise by its continuance, with the most important factor being the precise definition of recent corrective lows and bull risk parameters at 2.0202 and 1.9063 from which a still-advised bullish policy and exposure can be objectively rebased and managed.

In sum, a bullish policy and exposure remain advised with a failure below 2.0202 required for shorter-term traders to take profits and step aside and commensurately larger-degree weakness below 1.9063 for longer-term commercial players to follow suit.  In lieu of such weakness, further gains remain expected.

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