RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Not only does today’s relapse below 17-May’s 374.3 low confirm the past week-and-a-half’s recovery attempt and 38.2% retrace of this month’s 406.1 – 374.3 decline as a correction within the still-developing downtrend from that early-May high, its break of our key long-term risk parameter defined by 24-Apr’s 373.8 larger-degree corrective low confirms a bearish divergence in daily momentum that arguably breaks the 9-MONTH uptrend from 23Aug17’s 304 low. 01-May’s 406.1 high is left in the wake of this proof of larger-degree weakness and vulnerability that could expose weeks or even months of downside vulnerability that could easily extend to the 350-area or lower. Yesterday’s 387.6 smaller-degree corrective high serves as our new short-term risk parameter for still-advised bearish exposure for shorter-term traders.
Soybean Meal Jul '18 60min Chart
Soybean Meal Jul '18 Daily Chart

The daily log scale chart above shows the market’s break of 24-Apr’s 373.8 low that breaks AT LEAST the uptrend from 19-Mar’s 360.9 low. But given the:

  • • recent whopping 99% reading in our RJO Bullish Sentiment Index of the hot Managed Money positions reportable to the CFTC- its highest since the 100% that warned of and accompanied 2012’s all-time high at 541 and massive peak/reversal
  • • prospect that the entire rally from Aug’17’s 304 low to 02-May’s 406.5 high is a complete 5-wave Elliott sequence and
  • • the market’s rejection thus far of the upper-quarter of the past FOUR YEARS’ 258 – 432-range

traders are urged to bias towards a count calling for a more extensive correction or reversal lower with a minimum recovery above 387.6 now required to stem the threat.

The daily log scale chart above shows the 38.2% and 50% retraces of the 304 – 406 rally cutting across at 363 and 351, respectively, while the weekly log active-continuation chart below shows HUGE former resistance from the 348-to-353-range that, since broken back in Feb, now serves as an equally huge support candidate. For these reasons we believe this market could easily correct to the 350-area in the weeks or even months ahead.

These issues considered, a bearish policy remains advised for shorter-term traders with a recovery above 387.6 required to threaten this call and warrant its cover. Long-term players have been advised to neutralize previously recommended bullish exposure on today’ failure below 373.8 and are additionally advised to move to a near bearish policy at-the-market with strength above 387.6 required to pare this exposure to more conservative levels. Commensurately larger-degree strength above 406.5 is required to negate this bearish count and reinstate our even longer-term, multi-year base/reversal count. In lieu of such strength we anticipate further lateral-to-lower prices to the 350-area in the weeks and possibly months ahead.

Soybean Meal Weekly Chart

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