RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

This morning’s break below 04-Jun’s 59.02 low in the now-prompt Dec contract and our short-term risk parameter confirms a bearish divergence in short-term momentum.  This mo failure defines Mon’s 61.14 high as the end of the uptrend from 29-May’s 56.43 next larger-degree corrective low and our new short-term risk parameter from which shorter-term traders with tighter risk profiles can objectively based non-bullish decisions like long-covers.

Against the backdrop of the past couple MONTHS’ broader base/correction/reversal however shown in the daily chart below, this momentum failure is of too small a scale to conclude anything more than another interim correction within the broader bull similar to late-May’s 3-wave correction from 59.59 to 56.43 labeled in the 240-min chart above.  Indeed, this week’s sell-off attempt has thus far only unfolded into a 3-wave thus a potentially corrective structure that has stalled at the exact (58.74) 50% retrace of late-May/early-Jun’s 56.43 – 61.14 rally.  Smaller-degree strength above yesterday’s 60.37 minor corrective high will render this week’s slip a 3-wave and thus corrective event and re-expose the major recovery to new highs above 61.14.

IF this week’s slip is the start of an alternate broader peak/reversal count, minimally, it needs to resume trendy, impulsive behavior below today’s 58.75 low AND eventually break 29-May’s 56.43 larger-degree corrective low and key risk parameter.  Until such weakness is shown, longer-term players are advised to maintain a bullish policy and first approach this setback attempt as another corrective buying opportunity.

Finally, the weekly log chart of the Dec contract shows the market engaging key former support from Sep’19 around the lower-61-handle that cannot be ignored as a new resistance candidate, especially in light of this week’s minor momentum failure.  By the same token however, the market’s gross failure to sustain losses below FOUR YEARS of 54.50-to-56.50-area support on a monthly log active-continuation basis below is hard to consider as anything other than the bear’s total failure to perform and a developing bullish factor that could be major in scope, especially given the historic extent to which market sentiment/contrary opinion indicators collapsed.

In sum, a bullish policy remains advised for long-term players with a failure below 56.43 still required to negate this call and warrant its cover.  Shorter-term traders have been advised to neutralize bullish exposure and are further advised to maintain a neutral/sideline position for the time being.  We believe it’s as likely as not that this week’s setback is just another correction and that the next punt for shorter-term traders will again be from the bull side, but the market hasn’t yet arrested this intermediate-term slide with a countering bullish divergence in mo.  A recovery above 60.37 would tilt the shorter-term directional scales back to the bull side.

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