RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Today’s break below yesterday’s 92.91 initial counter-trend low confirms exactly the type of bearish divergence in shorter-term momentum we discussed in 15-Jul’s Technical Blog needed to stem mid-Jul’s recovery attempt and render it a 3-wave and thus corrective affair within a broader, if intra-range peak/reversal count. This mo failure defines Thur’s 93.67 high as the (B- or 2nd-Wave) end to a suspected correction from 10-Jul’s 92.21 low ahead of a resumption of late-Jun/early-Jul’s initial downtrend. Per such this 93.67 level serves as our new short-term risk parameter from which a bearish policy and exposure can be objectively based and managed.

Traders are reminded that the past couple days’ relatively minor weakness comes on the heels of early-Jul’s bearish divergence in DAILY momentum that, in fact, broke Apr-Jun’s uptrend. Combined with market sentiment/contrary opinion levels reaching historically frothy level DESPITE the market remaining trapped within a mere lateral long-term environment shown in the weekly log chart below, we believe this market is now vulnerable to relatively steep, if intra-range losses and presents a favorable risk/reward selling opportunity.

These issues considered, traders are advised to move to a cautious bearish policy and exposure at-the-market (92.82) with a recovery above 93.67 required to negate this call and warrant its cover. In lieu of such strength we anticipate further and possibly prolonged weakness to sub-90.00 levels in the weeks and months ahead.

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