RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Yesterday’s accelerated continuation of the secular bull trend to yet another round of new all-time high leaves yesterday’s 2597 low in its wake as the latest smaller-degree corrective low this market is now minimally required to fail below to even defer the bull, let alone threaten it. In this regard that 2597 low is considered our new short-term risk parameter from which shorter-term traders with tighter risk profiles can objectively rebase and manage the risk of a still-advised bullish policy and exposure.

E-mini S&P 500 Dec 17 240min Chart

E-mini S&P 500 Dec 17 Daily Chart

On a broader scale we’re trailing our longer-term risk parameter to 15-Nov’s 2555 corrective low shown in the daily log scale chart above. A failure below 2555 would likely mean the rally from 21-Aug’s 2415 low was a complete 5-wave Elliott sequence that then would warn of a correction of this portion of the bull. Relative to the magnitude of the secular bull market shown in the weekly log chart below however, such a sub-2555 failure would only constitute a “minor” momentum failure that would first have to be approached as just a slightly larger-degree correction.

Indeed, this market has rallied so much and is so strong that to truly threaten it with a major correction or bear market, MONTHS of peak/reversal behavior or a failure below at least 21-Aug’s 2415 corrective low would be required. As either of these two requirements is impractical for all but very long-term players, we’re opting to trail our “longer-term” risk parameter to 2555 and exchange whipsaw risk for much larger nominal risk on still-advised bullish exposure.

E-mini S&P 500 Weekly Chart

And finally, the monthly log scale chart below is a wonder to behold. As difficult as many range-bound markets like nat gas, T-notes, USDBRL and bean oil are, that’s how easy this incessantly up-trending S&P market is. The trend is up on all scales with NO levels of any technical merit above it. In effect there is no resistance. The ONLY levels of any technical merit exist only BELOW THE MARKET in the forms of former resistance-turned-support (like mid-Nov’s 2590-to-2595-area) and prior corrective lows (like 2597 and 2555). Until and unless this market fails below levels like these- and this is the same discipline and policy we’ve replayed for months as the bull has continued- the trend is up and should not surprise by its continuance or acceleration. The market’s upside potential remains as indeterminable and potentially extensive from current 2630-area prices as it was a year ago after the post-presidential election breakout above 23Aug16’s previous 2192 all-time high.

In sum, a full and aggressive bullish policy and exposure remain advised with a failure below 2597 required for shorter-term traders to step to the sidelines. Commensurately larger-degree weakness below 2555 is required for longer-term players to take similar defensive action ahead of what then would be an expected larger-degree correction lower. In lieu of such weakness further and possibly accelerated gains remain expected.

E-mini S&P 500 Monthly Chart

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