RJO FuturesCast

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In yesterday’s Technical Webcast we discussed 13-Apr’s 360.75 corrective low as our short-term bull risk parameter the market needed to sustain gains above to maintain a more immediate bullish count.  The hourly chart below shows the market’s failure to do so, confirming a bearish divergence in short-term momentum that defines yesterday’s 376.00 high as the possible end to a 5-wave sequence up from 29-Mar’s 315.75 larger-degree corrective low and key long-term risk parameter.  As a result, yesterday’s 376.00 high serves as our new short-term risk parameter from which non-bullish decisions like long-covers and cautious bearish punts can be objectively based and managed by shorter-term traders with tighter risk profiles.

Given the magnitude of the secular bull trend and erven the extent and impulsiveness of the latest portion of the bull from 315.75 however, this week’s setback attempt falls well within the bounds of a smaller-degree (4th-Wave) correction ahead of a (5th-Wave) resumption of the rally from 315.75 consistent with the secular bull market.  At this juncture however, the market has specific yesterday’s 376.00 high as THE level around which to make this judgment.

From a longer-term perspective, only a glance at the daily (above) and weekly log (below) charts of the Sep contract is needed to see that the secular bull trend remains the dominant technical factor.  Indeed, the market has yet to concede to prices even below former 350.00-area resistance-turned-support, let alone fail below 29-Mar’s 315.75 larger-degree corrective low and key long-term risk parameter needed to complete a larger-degree 5-wave sequence up from 14-Jan’s 241.00 low.  Per such, this 315.75 level remains intact as our key long-term bull risk parameter pertinent to longer-term commercial players.

On an active-continuation basis, the weekly log chart below does not yet reflect Sep contract prices, but this should change within a week.  Putting this chart closer to 29-Mar’s 347.50 low and risk parameter in the May contract, traders are urged to focus on 29-Mar’s 315.75 corrective low in the Sep contract as our key long-term bull risk parameter.

These issues considered, shorter-term traders have been advised to move to a neutral/sideline position in order to circumvent the depths unknown of a slightly larger-degree correction or possible reversal lower.  A recovery above 376.00 negates this call, chalks up this week’s setback as a correction and reinstates the secular bull that would warrant a return to a bullish policy.  Longer-term players remain advised to maintain a bullish policy and exposure with a failure below 315.75 required to negate this call and warrant moving to a neutral/sideline position ahead of a broader peak/reversal threat.

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