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Posted on Nov 16, 2023, 08:18 by Dave Toth
Stemming from an area of former support-turned-resistance around the 80-handle-area, the past couple days’ relapse identifies Tue’s 79.77 as the end of what we believe is thus far only a 3-wave event from 08-Nov’s 74.91 low. Left unaltered by a recovery above 79.77, we believe this high defines the end or upper boundary of another correction within our broader peak/reversal count introduced in 02-Oct’s Technical Webcast ahead of a resumption of month-and-a-half decline to new lows below 74.91. Per such, we’re defining 79.77 as our new short-term parameter from which shorter-term traders can objectively rebase and manage the risk of a still-advised bearish policy and exposure.
![](https://rjofutures.rjobrien.com/images/2023/11/CL-240.gif)
![](https://rjofutures.rjobrien.com/images/2023/11/CL-active-daily.gif)
The daily log chart above shows the developing downtrend from 28-Se’s 95.03 high that can be one of only two things at this point:
- a 3-wave correction of Jun-Sep’s uptrend or
- an eventual 5-wave reversal of this year’s entire 3-wave and thus corrective recovery from 20-Mar’s 64.36 low shown in the weekly chart below.
This means the portion of the decline from 20-Oct’s 89.85 high is either the completing C-Wave of the bull market correction OR the dramatic 3rd-Wave of a major reversal lower. The latter, bearish count would be expected to be characterized by sustained, trendy, impulsive and increasingly obvious behavior lower. Indeed, the 1.618 progression of late-Sep/early-Oct’s prospective 1st-Wave from 95.03 to 81.50 taken from the prospective 2nd-Wave high at 89.95 doesn’t cut across until the 70.08-area.
Conversely, if the market is trying to complete a correction “down here somewhere, it must at least recoup Tue’s 79.77 high to render it an initial counter-trend high and confirm a bullish divergence in daily momentum. Secondarily, a recovery above 06-Oct’s suspected 1st-Wave low at 81.50 is required to jeopardize the impulsive integrity of the 5-wave reversal lower. Per such, we’re identifying 81.50 as our new key long-term bear risk parameter pertinent to longer-term commercial players. Until this market recoups at least 79.77 and preferably 81.50, further and possibly protracted losses remain expected.
![](https://rjofutures.rjobrien.com/images/2023/11/CL-active-weekly.gif)
Lastly, we would remind traders of this market’s residence still deep, deep within the middle-half bowels of its massive but lateral historical range where the odds of aimless whipsaw risk are still approached as high, warranting a more conservative approach to directional risk assumption. Herein lies the importance of identifying tighter but objective risk parameters like 79.77 and 81.50.
These issues considered, a bearish policy and exposure remain advised with a recovery above 769.77 required for shorter-term traders to move to the sidelines and commensurately larger-degree strength above 81.50 for longer-term commercial players to follow suit. In lieu of such strength, further and possibly protracted losses remain expected.
![](https://rjofutures.rjobrien.com/images/2023/11/CL-active-monthly.gif)