RJO FuturesCast

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In Wed’s Technical Blog we alluded to the likelihood that that day’s failure below 15.58 rendered May’s 15.24-to-16.59 recovery attempt a 3-wave and thus corrective affair that warned of a resumption of the major bear trend from Sep’16’s 24.10 high.  This bearish count was confirmed with this morning’s break below 05-May’s 15.24 low detailed in the 2140-min chart below.  As a direct result of this resumed slide this chart also shows that the market has identified an intra-day corrective high from Wed at 15.78 and certainly 22-May’s 16.59 high as our new short- and longer-term risk parameters the market must now recoup to threaten and then negate a broader bearish count.

Sugar 240 min Chart

Sugar Daily Chart

Today’s break below 15.24 nullifies last week’s bullish divergence in momentum and chalks up the recovery attempt to 16.59 as a mere correction within the major downtrend. The trend is down on all scales and should be expected to continue and perhaps accelerate with ALL pertinent technical levels ONLY above the market in the form of former 15.24-to-15.44-range support-turned-resistance and prior corrective highs like 15.78 and 16.59.

In effect there is no support as only “derived” levels can be postulated below spot.  And as we know with absolutely certainty, such derived levels as channel lines, Bollinger Bands, the ever-useless moving averages and even the vaunted Fibonacci progression relationships we cite often in our analysis have never proven to be reliable reasons to forecast support or resistance without an accompanying momentum failure to, in fact, break the trend at hand.  And they never will.

These issues considered, a full and aggressive bearish policy is advised with strength above at least 15.78 and preferably 16.60 required to threaten and then negate this call.  In lieu of such strength further and possibly accelerated losses are expected straight away.  The market’s downside potential is indeterminable and potentially severe.

Sugar Weekly Chart

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