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Technical Summary: T-Notes, Coffee, Cocoa

Posted 04/16/2019 8:20AM CT | RJO Market Insights

JUN 10-Yr T-NOTES

Overnight’s continued weakness below 15-Mar’s 122.30 high and pivotal area of former resistance-turned-support jeopardizes the impulsive integrity of the broader rally from 18-Jan’s 121.02 low and reinforces a count calling for a larger-degree correction or reversal lower, including a correction or reversal of the major rally from last Oct’s 117.13 low.  This resumed weakness clearly leaves 10-Apr’s 123.295 high in its wake as the latest smaller-degree corrective high and short-term but key risk parameter to non-bullish decisions like long-covers and new bearish punts.  The even greater importance of 27-Mar’s 124.31 high as a potentially major high and key long-term risk parameter goes without saying.

These issues considered, a bearish policy remains advised for shorter-term traders with a recovery above 123.30 required to negate this call and warrants its cover.  Long-term players have been advised to  neutralize all remaining bearish exposure and are further advised to establish a cautious bearish policy from 123.00 OB with a recovery above 123.30 required to negate this call and warrants its cover.  In lieu of at least 123.30+ strength, further and possibly extensive losses should not surprise.

10-Year Note Daily Chart

JUL COFFEE

Coffee Jul '19 240 Min Chart

 

As a result of the contract roll from May to Jul, the 240-min chart of the now-prompt Jul contract above shows 11-Apr’s resumption of the secular bear trend leaving 09-Apr’s 97.30 high and 04-Apr’s 99.40 high as the latest smaller- and larger-degree corrective highs this market is now required to recoup to even defer, let alone threaten the major downtrend.  Per such these levels represent our new short- and longer-term risk parameters to a still-advised bearish policy and exposure.  The market’s downside potential remains indeterminable and potentially severe.

Coffee Daily Chart

 

JUL COCOA

Cocoa Jul '19 240 Min Chart

Today’s failure below 09-Apr’s 2369 minor corrective low in the now-prompt Jul contract detailed in the 240-min chart above confirms a bearish divergence in momentum that leaves 11-Apr’s 2434 high in its wake as one of developing importance and possibly the end of the recent impressive rally from 21-Mar’s 2128 low.  Basis a daily active-continuation chart below however, we’re identifying 08-Apr’s 2443 high as the prospective end to the rally and our new short-term risk parameter from which non-bullish decisions like long-covers and cautious bearish punts can now be objectively based and managed.

Given the market’s rejection thus far of the extreme upper recesses of this year’s range, we don’t want to underestimate the extent to which this market might now be vulnerable to a relapse, versus a relatively minor (4th-Wave) correction ahead of a resumption of Mar-Apr’s rally.  Traders are also reminded of this market’s position still deep within the middle-half bowels of an incessant 2-YEAR lateral range where aimless whipsaw risk easily could still reside.

These issues considered and unless you’re a very long-term player who can assume the risk of a bullish policy to 21-Mar’s 2113 low, we advise moving to a neutral/sideline position to circumvent the depths unknow of a correction or reversal lower.  Strength above 2443 is required to negate this call, reinstate the  bull and expose potentially sharp gains thereafter.

Cocoa Daily Chart

 

 

RJO Market Insights