RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Overnight’s continuation of the secular bull trend, this time above Mon’s 131.71 high, reaffirms the trend and leaves yesterday’s 128.12 low in its wake as the latest smaller-degree corrective low the market is now required to sustain gains above to maintain a more immediate bullish count.  Its failure to do so will confirm a bearish divergence in short-term momentum and expose at least an interim (4th-Wave) correction, but possibly a more protracted reversal lower.  Per such, we’re identifying 128.12 as our new short-term risk parameter from which shorter-term traders with tighter risk profiles can objectively rebase and manage the risk of a still-advised bullish policy and exposure.

An admitted short0-term mo failure below 128.12 would still leave the market above a goodly amount of former resistance-turned-support from the 125.83-to-123.30-area that would be expected to hold per any broader bullish count.  But at such high nominal levels, here’s a lot of green and risk between 128.12 and 123.30 for shorter-term traders to endure, so that 128.12 level is clearly the preferred bull risk parameter for shorter-term traders.

From a longer-term perspective and on the heels of the past couple weeks’ impulsive resumption of the secular bull market, a failure below 07-Mar’s 115.37 larger-degree corrective low is MINIMALLY required to confirm a bearish divergence in momentum of a scale sufficient to break the major bull.  Per such, this level remains intact as our key long-term bull risk parameter pertinent to longer-term commercial players.

Yes, market sentiment/contrary opinion levels remain stratospherically high and typical of major peak/reversal environments.  And we’ve no doubt that this factor will contribute to the inevitable end to this super-bull and a massive peak/reversal.  But traders are reminded that contrary opinion is not an applicable technical tool in the absence of an accompanying confirmed bearish divergence in momentum needed to break the clear and present and major uptrend and reject/define a more reliable high and resistance from which non-bullish decisions can only then be objectively based and managed.

Also as a reminder, referring to this or any such major uptrending market as “overbought” is, as always, useless, risky, subjective and outside the bounds of technical discipline.

Finally and on an even large scale, the monthly log active-continuation chart below shows NO levels of any technical pertinence above the market shy of 2011’s 219.70 all-time high.  This doesn’t mean we’re forecasting a move to 219.  But it certainly does mean that until and unless this market breaks the uptrend with a confirmed mo failure below 115.37, the market’s upside potential is indeterminable and potentially extreme, including a run at 219.  In 2020 and 2016 the market poked into the lower-quarter of this market massive historical range before a major correction and major reversal.  The current rally is approaching its upper-quarter where, conversely, we will keep a keen eye on momentum and a bearish divergence that could have equally bearish ramifications.  Until such a mo failure arrests the major bull, further and possibly accelerated gains remain expected.

In sum, a bullish policy and exposure remain advised with a failure below 128.12 required for shorter-term traders to take profits and move to a neutral/sideline position, with subsequent weakness below 115.37 required for longer-term commercial players to follow suit.  In lieu of such weakness, further and possibly accelerated gains should not surprise.

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