RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

In yesterday’s Technical Blog we identified Fri’s 2440 minor corrective high as the micro risk parameter the market needed to sustain losses below to avoid confirming a bullish divergence in short-term momentum needed to stem the slide from at least 16-Aug’s 2474 high.  The 240-min chart below shows the market’s failure to do so this morning, confirming a bullish divergence in momentum that defines yesterday’s 2415.75 low as the END of the decline from 16-Aug’s 2474 high.  In this regard 2415 is considered our new micro risk parameter from which non-bearish decisions like short-covers and cautious bullish punts can now be objectively based and managed.

In addition to this confirmed bullish divergence in momentum, it certainly is interesting to note that the resumed (and suspected c-Wave) decline from 16-Aug’s 2474 high spanned an identical length (i.e. 1.000 progression) to the preceding decline from 08-Aug’s rogue 2489 high to 11-Aug’s 2430 low.  This Fibonacci fact could be a contributing one to a broader bullish count that contends this month’s sell-off attempt is a 3-wave and thus corrective structure consistent with the secular bull.

Emini 240 min Chart

Emini Daily Chart

Despite this very short-term strength above 2440 and the “appearance” of only a 3-wave decline thus far this month, commensurately larger-degree proof of strength above 16-Aug’s 2474 intra-day high or 2467 daily close remains required to CONFIRM this 3-wave, corrective structure and re-expose the secular bull.  But while it would be premature at this point to conclude such a bullish count, it is important to note that the market has now identified a specific and reliable low at 2415 from which the risk of any bullish decisions can be objectively based and managed.

Emini Daily Chart

On an even broader scale the magnitude of the secular bull is clear in the weekly log scale chart below.  On this scale a failure below AT LEAST 29-Jun’s 2402 larger-degree corrective low and key risk parameter remains minimally required to even defer this uptrend, let alone threaten it, so a bullish policy and exposure remain advised for long-term players until that 2402 threshold is broken.  Shorter-term traders with tighter risk profiles are advised to move back to a cautious bullish policy and first approach setback attempts to the 2440-area OB as corrective buying opportunities with a failure below 2415 negating this call, resurrecting this month;s correction and exposing potentially steeper losses thereafter.

Emini Weekly Chart

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