Euro Bund Mar '19 240 Min Chart

Yesterday’s break below the past couple weeks’ 165.84-area support confirms a bearish divergence in shorter-term momentum but one that could lead to more protracted losses given the market’s recent proximity to the extreme upper recesses of the past 2-1/2-YEAR range.  As a result of this mo failure shown in the 240-min chart above, the market has defined 08-Feb’s 166.83 high as one of developing importance and possibly the END of a major 5-wave Elliott sequence up from 05Oct18’s 157.96 low as labeled in the daily log chart below.  Per such this 166.83 level becomes our new short-term risk parameter from which long-covers and cautious bearish punts can now be objectively based and managed.

Given the extensive backdrop of the 4-month rally, this momentum failure is of to small a scale to CONCLUDE the end of the major bull at this point.  Commensurately larger-degree weakness below 09-Jan’s 163.48 next larger-degree corrective low remains require to, in fact, break this major uptrend.  Per such this 163.48 low remains intact as our key long-term risk parameter from which longer-term players can still base and manage the risk of a bullish policy.

Euro Bund Mar '19 Daily Chart


Contributing to this peak/reversal threat and reason for a more conservative approach to risk assumption is the market’s proximity to the extern upper recesses of the past 2-1/2-year range shown in the weekly active-continuation chart below.  If there’s a time and place to be leery of a broader relapse, it is here and now from such upper-range, slippery slope conditions.

These issues considered, shorter-term traders are advised to move to a neutral-to-cautiously-bearish stance with a recovery above 08-Feb’s 166.83 high and our new short-term risk parameter required to negate this call.  Long-term players are advised to pare bullish exposure to more conservative levels and jettison the position altogether on a failure below 163.48.

Euro Bund Weekly Chart

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.