RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

By virtue of yesterday rebound, we’d like to draw traders’ attention to yesterday’s 19.01 low, the break below which would render it an initial (A- or 1st-Wave) low and confirm a currently threatening bearish divergence in momentum.  Given the extent of last week’s rally that left little in the way of battlegrounds below 19.01 shy of former 18.25-to-18.00-area resistance-turned-support, yesterday’s 19.01 low is the tightest yet objective parameter from which shorter-term traders can manage the risk of interim bullish exposure.

A failure below 19.01 would also be deemed more important stemming from the extreme upper recesses of the 20.29-to-17.39-range that has constrained this market for the past FIVE MONTHS, where it also remains conceivable that the recovery from 10-Jan’s 17.39 low or 03-Feb’s 17.48 low is just a corrective B- or 2nd-Wave within a massive peak/reversal process.  A failure below 19.01 will not necessarily negate a longer-term bullish count or confirm a resumed bearish one.  But it would question the risk/reward merits of maintaining a bullish policy “up here” enough to warrant paring or neutralizing bullish exposure.

From an even longer-term perspective, we would remind traders of the unique combination of major peak/reversal elements from Oct’21’s 20.29 high on a weekly log close-only basis below:

  • a confirmed bearish divergence in WEEKLY momentum amidst
  • what was historically frothy bullish sentiment and
  • a complete 5-wave Elliott sequence from Apr’20’s 9.81 low.

To negate this major peak/reversal count, the market needs to recoup last Oct’s 20.29 high.  Until and unless such long-term strength is resurrected, the past month’s recovery attempt cannot be ignored as a B- or 2nd-Wave correction within a peak/reversal process that could be major in scope.  These issues considered, a cautious bullish policy remains OK with a failure below 19.01 required to threaten this call enough to warrant moving to at least a neutral/sideline position.  Cautious bearish exposure on the immediate break below 19.01 would be OK with a recovery above Mon’s 19.89 high required to negate this call.

RJO Market Insights

RJO Market Insights specializes in forward-thinking analysis, focused on potential market-moving events and dominant factors driving price discovery. Detailed fundamental and technical coverage across multiple commodity sectors is combined with objectively-constructed trade recommendations to provide an industry-leading product for R.J. O’Brien’s Institutional clients, commercial hedgers, introducing brokers and individual investors free of charge. Content is distributed in both text and audio formats, with specialized service offerings provided by account type.
For more information on RJO Market Insights, contact your broker or RJO representative.