RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Posted on Dec 15, 2022, 09:02 by Dave Toth

With today’s break above both 16-Nov’s 20.48 high in the Mar contact AND 18Nov21’s 20.69 high on a weekly log active-continuation basis below, the market has confirmed the lateral chop from last year’s 20.69 high to 19-Sep’s 17.19 low as a corrective/consolidative structure and reinstated and reaffirmed the 32-MONTH secular bull market from Apr’21’s 9.21 low.  While Sep’s 17.19 low is the very long-term corrective low this market is now required to fail below to expose a major peak/reversal process, we’re identifying 28-Nov’s 19.05 corrective low as the risk parameter this market has to sustain gains above to maintain a bullish policy and exposure pertinent to longer-term commercial players.

Drilling down to a daily scale, the chart below shows today’s clear continuation of the impressive, impulsive rally from 19-Sep’s 17.19 low that could be on the cusp of completing a textbook 5-wave Elliott sequence.  As this market has posted a new high for the secular bull trend, there are NO levels above the market of any technical merit, so the bull is free to PERFORM.  And by perform, we mean sustain trendy, impulsive behavior higher.

If we’re supposed to be long (and we are since the trend is up on all scales), then it is imperative for the market to maintain its impulsive behavior to the upside.  This means above 30-Nov’s suspected minor 1st-Wave high at 19.94 and especially above 28-Nov’s 19.05 larger-degree corrective low.  Its failure to do so will not only threaten and then negate the uptrend from 19-Sep’s 17.19 low, but also resurrect a PEAK/reversal environment that could be massive in scope.

Current historically frothy sentiment/contrary opinion levels in our RJO Bullish Sentiment Index (84% reflecting 246K Managed Money long positions to just 47K shorts) is NOT an applicable technical tool until and unless the market breaks the uptrend below 19.05.  But should such a failure be confirmed, then the combination with historically extreme bullish sentiment will expose a major peak/reversal threat.

These issues considered, a bullish policy and exposure remain advised with a failure below 19.94 required for shorter-term traders to neutralize exposure and commensurately larger-degree weakness below 19.05 for longer-term commercial players to follow suit.  In lieu of such weakness, the trend is up on all scales and should not surprise by its continuance or acceleration straight away.

RJO Market Insights

RJO Market Insights specializes in forward-thinking analysis, focused on potential market-moving events and dominant factors driving price discovery. Detailed fundamental and technical coverage across multiple commodity sectors is combined with objectively-constructed trade recommendations to provide an industry-leading product for R.J. O’Brien’s Institutional clients, commercial hedgers, introducing brokers and individual investors free of charge. Content is distributed in both text and audio formats, with specialized service offerings provided by account type.
For more information on RJO Market Insights, contact your broker or RJO representative.