As a direct result of Fri’s poke to another new high for the past month’s impressive rebound, the 240-min chart below shows that the market has identified 29-Sep’s 112.21 low as the latest smaller-degree corrective low it now has to sustain gains above to maintain a more immediate bullish count. It’s failure to do so will confirm a bearish divergence in momentum, stem the rally and expose at least an interim correction of the rally from 08-Sep’s 107.31 low. Per such we are considering 112.20 our new short-term but key risk parameter from which traders are advised to rebase and manage the risk of a cautious bullish policy.
This admittedly very tight but objective risk parameter at 112.20 may come in handy given the threatening combination of waning upside momentum on a daily basis above and near the extreme upper recesses of the past seven months’ lateral range. Moreover, the weekly chart below shows the market still deep within the middle-half bowels of the past couple YEARS’ range where the odds of aimless whipsaw risk remain high and warrant a more conservative approach to risk assumption.
These issues considered, a cautious bullish policy and exposure remain advised with a failure below 112.20 required to threaten this call enough to warrant moving to the sidelines immediately in order to circumvent the depths unknown of a correction or reversal lower.