Today’s clear, impulsive break below both Thur’s 3.0510 low and 17-Nov’s 3.0315 initial counter-trend low is consistent with our broader peak/reversal count introduced in 27-Oct’s Trading Strategies Blog and leaves Fri’s 3.1255 high in its wake as the latest smaller-degree corrective high this market is now minimally required to recoup to threaten this bearish call. Per such 3.1255 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 bearish policy and exposure from 3.1400 OB. Former 3.03-to-3.05-area support is considered new near-term resistance ahead of further and possibly steep losses.
With today’s resumed weakness shown in the daily chart above, the market can now look back on a month-and-a-half’s worth of peak/reversal-threat behavior while the weekly log active-continuation chart below provides the factors on which a broader peak/reversal count are predicated, including:
• an arguably complete 5-wave Elliott sequence from Jan’16’s 1.9355 low amidst
• historically frothy sentiment not seen since at least 2006 and
• waning upside momentum.

To be sure, given the magnitude of 21-month uptrend, the market has yet to erode enough to suggest the past mere month-and-a-half’s setback is anything more than another interim BULL market correction. But until and unless this market recoups at least Thur’s 3.1255 corrective high and short-term risk parameter, the listed items above are unique and compelling and, if correct as bearish threats, could expose extensive losses in the week and even months ahead.

In sum, a bearish policy and exposure from 3.1400 OB remain advised with strength above 3.1255 required to threaten this call enough to warrant its cover. In lieu of such 3.1255+ strength further and possibly accelerated losses remain expected.



RJO Market Insights

RJO Market Insights specializes in forward-thinking analysis, focused on potential market-moving events and dominant factors driving price discovery. Detailed fundamental and technical coverage across multiple commodity sectors is combined with objectively-constructed trade recommendations to provide an industry-leading product for R.J. O’Brien’s Institutional clients, commercial hedgers, introducing brokers and individual investors free of charge. Content is distributed in both text and audio formats, with specialized service offerings provided by account type.
For more information on RJO Market Insights, contact your broker or RJO representative.