RJO FuturesCast

Daily Futures Market News, Commentary, & Insight


The combination of the market’s close proximity to the past month’s 18.54 range cap and waning upside momentum on a shorter-term basis presents a slippery slope for bulls “up here”.  Per such traders are urged to trail protective sell-stops on cautious bullish exposure to levels just below Fri’s 18.08 low, the failure below which would confirm a bearish divergence in momentum, break the uptrend from 15-Mar’s 16.825 low and expose at least a slightly larger-degree correction low.  At most such a mo failure could expose a run at the lower-quarter of the past month’s range.

Silver 240 min Chart

Silver Daily Chart

The daily log active-continuation chart above shows the pertinence of 27-Feb’s 18.54 high and range cap.  And if that weren’t enough the weekly log chart below shows a still-whopping 89% reading in our RJO Bullish Sentiment Index reflecting 93K Managed Money long positions reportable to the CFTC versus only 11K shorts.  If there’s a time and place for this market to recoil, it is here and now.

From a longer-term perspective however commensurately larger-degree weakness below 15-Mar’s 16.825 larger-degree corrective low and key risk parameter remains required to threaten our long-term bullish count.  This count contends that 20Dec16’s 15.675 low completed or defined the lower boundary to a major B- or 2nd-Wave correction of 2016’s 13.62 – 20.835 rally within a BASE/reversal process that is major in scope.  If correct this count calls for a resumption of 2016’s initial counter-trend rally to eventual new highs above 21.00.

Silver Weekly Chart

The monthly log scale chart below shows Jun’16’s bullish divergence in momentum that, in fact, breaks the secular bear market from Apr’11’s 49.82 all-time high, exposing a major correction or reversal of the 4-1/2-year bear market.  These issues considered, a cautious bullish policy remains advised with a failure below 18.06 required for both short- and longer-term traders to neutralize bullish exposure ahead of another intra-range correction that we believe will provide a preferred risk/reward condition from which to reset a bullish policy.  In lieu of such sub-18.06 weakness further gains should not surprise with a break above 27-Feb’s 18.54 high exposing potentially sharp gains.

Silver Monthly Chart



The market’s whipsaw above 20-Mar’s 2.7000 high and subsequent momentum failure below Thur’s 2.6535 corrective low maintains our bearish count that identifies the recovery attempt from 09-Mar’s 2.5585 low a 3-wave correction within a larger-degree correction down from 13-Feb’s 2.8230 high as labeled in the 240-min chart below.  Per such Thur’s 2.7170 high serves as our new short-term risk parameter from which interim bearish exposure can be objectively based and managed.

Copper 240 min Chart

Copper Daily Chart

The combination of early-Mar’s bearish divergence in daily momentum amidst historically frothy bullish sentiment levels leaves this market prone to a larger-degree correction of what we believe is a complete 5-wave Elliott sequence from Jun’16’s 2.0130 low to Feb’s 2.8230 high as labeled in the weekly log chart below.  we believe this correction has legs for the 2.48-to-2.45-range represented by the 38.2% retrace of the 2.0130 – 2.8230 rally and Dec’16’s 4th-Wave correction of lesser degree.  Strength above at least 2.7170 and preferably 13-Feb’s 2.8230 high is required to threaten or negate this call.

Copper Weekly Chart

From an even longer-term perspective however, the monthly log scale chart below shows the market’s break of the secular bear trend from Feb’11’s 4.65 all-time high to Jan’16’s 1.9355 low exposing a major, multi-year correction or reversal higher.  This is the bullish backdrop within which relapse attempts are advised to first be approached as corrective buying opportunities.

In sum, an interim bearish policy remains advised with strength above 2.7170 minimally required to threaten this call and warrant neutralizing bearish exposure.  In lieu of such strength we anticipate further and possibly accelerated losses to the 2.48-to-2.45-range.

Copper Monthly Chart


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.
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