Fri and overnight’s continuation of the secular bear market below Thur’s 117.195 low leaves Thur’s 118.01 high in its wake as the latest smaller-degree corrective high the market is now required to sustain losses below to maintain a more immediate bearish count.  Its failure to do so will confirm a bullish divergence in short-term momentum and likely complete a textbook-looking 5-wave Elliott sequence down from 28-Sep’s 119.00 larger-degree corrective high and key long-term risk parameter.  Per such, shorter-term traders with tighter risk profiles are advised to use 118.01 as our new short-term risk parameter from which a bearish policy and exposure can be objectively rebased and managed.

10-Year Note Dec '18 240 Minute Chart


10-Year Note Daily Chart

Needless to say against the backdrop and magnitude of the secular bear trend shown in the daily (above) and weekly active-continuation (below) charts, such a short-term mo failure above 118.01 would only allow us to conclude the end of the downtrend from 28-Sep’s 119.00 next larger-degree corrective high, NOT the end of the major downtrend.  Indeed, even after a bullish divergence in short-term mo above 118.01, the market would remain below key former 118.11-area support-turned-resistance, let alone 28-Sep’s 119.00 corrective high this market is MINIMALLY required to recoup to threaten the long-term bear.

These issues considered, a bearish policy and exposure remain advised with a recovery above 118.01 required for shorter-term traders to pare or neutralize bearish exposure.  Commensurately larger-degree strength above 119.00 remains required for long-term players to take similar defensive action.  In lieu of such strength further and possibly accelerated losses remain expected.

10-Year Note Weekly Chart


The technical construct and expectations for the Dec19 Eurodollar market are identical to those detailed above in 10-yr Treasuries with Thur’s 96.79 high and 02-Oct’s 96.885 high serving as our short- and longer-term risk parameters to a still-advised bearish policy.

Eurodollar Dec '19 240 Minute Chart


Eurodollar Dec '19 Daily Chart

Eurodollar Dec '19 Weekly Chart

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.