RJO FuturesCast

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Overnight’s break above last week’s 152.92 high reaffirms our interim bullish count introduced in 23-Jun’s Technical Blog and Mon’s 149.75 low in its wake as the latest smaller-degree corrective low this market now needs to sustain gains above to maintain a more immediate bullish count.  It’s failure to do so will confirm a bearish divergence in daily momentum, break the past month’s uptrend and expose at least a (B- or 2nd-Wave) correction of the rally from 16-Jun’s 140.67 low, and possibly re-expose the secular bear market.  And with the correlated Treasury and eurodollar markets flagging of late, traders are advised not to underestimate the bund market’s vulnerability following a failure below 149.75.  Per such, we’re identifying this 149.75 level as our new short-term but key risk parameter from which both shorter-term traders and longer-term institutional players are advised to rebase and manage the risk of an interim bullish policy and exposure.

On a broader scale, the daily chart above shows the clear and present developing recovery as well as the nicely developing POTENTIAL for a bearish divergence in momentum.  This potential will be CONFIRMED to the point of non-bullish action like long-covers and bearish punts if/when the market fails below 149.75 specifically.  Given the backdrop of the secular bear market shown in the weekly log active-continuation chart below in which the past month’s pop is easily considered a (4th-Wave) correction, even an admittedly smaller-degree momentum failure below 149.75 could re-expose the secular bear.  And the Fibonacci fact that this market has quickly retraced 38.2% of the suspected 3rd-Wave meltdown from Aug’21’s 177.61 high to 16-Jun’s 140.67 low would seem to reinforce at least an interim top if/when the market failed below 149.75.

These issues considered, a bullish policy and exposure remain advised with a failure below 149.75 required to not only neutralize this position immediately, but also to reverse into a cautious bearish position with protective buy-stops just above whatever high is left in the wake of such a sub-149.75 failure.  In lieu of such sub-149.75 weakness, further gains should not surprise.

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