RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Yesterday’s break below last week’s 1246.9 low reaffirms the developing downtrend and leaves Fri’s 1257.1 high in its wake as the latest smaller-degree corrective low the market is required to sustain losses below to maintain a more immediate bearish count. Its failure to do so will confirm a bullish divergence in momentum, stem at least Jun’s portion of a nearly-three-month slide and expose at least an interim correction higher. Per such we’re considering this 1257.1 high our new short-term risk parameter from which traders can objectively rebase and manage the risk of a still-advised bearish policy.
Gold 240-min Continuation Chart
Gold Daily Continuation Chart

This tight but objective risk parameter may come in handy given the developing threats against the bear, including:

  • the developing potential for a bullish divergence in daily momentum shown in the daily log close-only chart above
  • the Fibonacci progression fact that the decline from 14-Jun’s 1308.3 high close is virtually identical in length (i.e. 1.000 progression) to Apr-May’s preceding 1360 – 1289.4 decline
  • the market’s proximity to 12Dec17’s obviously key 1238.3 low shown in the weekly log scale chart below
  • the market’s rejection thus far of the (1241) (50% retracement of Dec’16 – Apr’18’s entire 1124.3 – 1369.4 rally and
  • this week’s lowest reading (51%) in our RJO Bullish Sentiment Index in 30 MONTHS!

If there’s a risk of a base/correction/reversal environment we believe it is here and now and will first be indicated by a bullish divergence in admittedly short-term momentum above 1257.1. These issues considered, a bearish policy remains advised with a recovery above 1257.1 required to defer or threaten this cal enough to warrant its cover. Proof of labored, 3-wave corrective behavior on a subsequent retest of yesterday’s 1238.3 low may then present a favorable risk/reward opportunity from the bull side.

Gold Weekly Continuation Chart

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