Posted on Oct 18, 2023, 07:54 by Dave Toth

Yesterday’s break below the past month’s 95.25 lows and support reaffirms and reinstate the 39-MONTH secular bear market and leave smaller-degree corrective highs in its wake at 95.405 and 95.59 that this market is now minimally required to recoup to even defer, let alone threaten the major bear.  Per such, these levels represent our new mini and short-term parameters from which shorter-term traders can objectively rebase and manage the risk of a still-advised bearish policy and exposure.

Former 95.25-area support is considered new near-term resistance ahead of further and possibly steep losses.

On a much large scale, the weekly chart above and monthly chart below show the sheer magnitude and dominance of the secular bear trend that should hardly surprise by its continuance.  The decline from 04-May’s 97.43 corrective high and exact 38.2% retrace of Aug’20 – Oct’22’s decline from 99.945 to 95.875 is likely either the completing C-Wave or dramatic 3rd-Wave of a major sequence down from the 2020 high.  If it’s “only” the C-Wave, it will reach its 0.618 progression of Aug’20 – Oct’22’s 99.945 – 94.875 plunge from May’s 97.43 high around 94.915.  BUT ONLY an accompanying confirmed bullish divergence in momentum from this or any other level will suffice in navigating a prospective bottom.  And this requires proof of strength above prior corrective highs of a scale sufficient to threaten the major bear.

In sum, a bearish policy and exposure remain advised with a recovery above at least 95.405 and preferably 95.59 required to pare or neutralize bearish exposure.  IN lieu of sch strength, the trend is down on all scales and is expected to continue and perhaps accelerate.