Overnight’s break above last week’s 1.2252 high reaffirms the developing uptrend, with the important by-product being the market’s definition of 19-May’s 1.2165 low as the latest smaller-degree corrective low this 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, break at least the portion of the past couple months’ uptrend from 05-May’s 1.1995 corrective low and expose a corrective relapse that could be more protracted in scope.  Per such, we’re identifying this 1.2165 low 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.

This tight but objective risk parameter at 1.2165 may come in handy given the market’s proximity to the extreme upper recesses of this year’s range shown in the daily chart above amidst waning upside momentum.  If there’s a time and place to require the bull to continue to behave like one with sustained, trendy, impulsive price action higher, it is here and now.  It may also prove important that the resumed rally from 05-May’s 1.1995 low has met exactly its (1.2267) 0.618 progression of 31-Mar-to-29-Apr’s preceding rally from 1.1721 to 1.2162.  Such a “derived” Fibonacci level will only mean anything if/when accompanied by a confirmed bearish divergence in momentum.  Herein lies the importance of last Wed’s 1.2165 smaller-degree corrective low and new short-term risk parameter.

From an even longer-term perspective, until and unless this market breaks the clear and present two-month uptrend from 31-Mar’s obviously pivotal 1.1721 larger-degree corrective low and key long-term risk parameter, longer-term institutional players should not be surprise at a continuation of the secular bull trend following Jan-Mar’s textbook 3-wave and thus corrective sell-off attempt and exact 38.2% retrace of Mar’20 – Jan’21’s 1.0671 – 1.2368 rally.  Until even deferred by a relapse below at least 1.2165, a continuation of last year’s major bull trend to new highs above 06-Jan’s 1.2368 high is anticipated.  And once above that threshold, there are no levels of any technical merit shy of Feb’18’s 1.2580 high, the break of which would confirm a massive, multi-year base/reversal count from Dec’16’s 1.0367 low.

These issues considered, a bullish policy remains advised with a failure below 1.2165 required for shorter-term traders to move to the sidelines and for even longer-term players to pare exposure to more conservative levels to reduce or eliminate the depths unknown of a subsequent correction lower.  In lieu of such sub-1.2165 weakness, further and possibly accelerated gains straight away should not surprise, including to new 2021 highs above 1.2368.