RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Yesterday’s relapse below last week’s 93.16 initial counter-trend low reaffirms our intra-range peak/reversal count discussed in 26-Jun’s Technical Blog and leaves Thur’s 93.74 high in its wake as the latest smaller-degree corrective high and new short-term risk parameter from which a cautious bearish policy can be objectively rebased and managed.  Until and unless the market recoups 93.74, the decline from that level may be the relatively dramatic 3rd-Wave of an eventual 5-wave Elliott sequence down that could pressure levels around early-Jun’s 91.03 low or below.

The fact that the past week’s relapse stems from the extreme upper recesses of what remains a very labored, 3-wave recovery attempt from 25-Mar’s 89.97 low reinforces a longer-term bearish that contends this 3-month lateral chop is a corrective/consolidative event that warns of a resumption of Mar’s meltdown that preceded it.  Clearly, 06-May’s 94.42 high and exact 50% retrace of Mar’s 98.87 – 89.97 collapse remains intact as THE KEY resistance and longer-term risk parameter the market needs to recoup to negate this longer-term, if intra-long-term-range bearish count that could produce levels below 89.97.

The challenge to this (or any) count is that the past three months’ lateral range remains a subset within the middle-half bowels of this market’s massive FIVE YEAR lateral range where continued aimless whipsaw risk should hardly come as a surprise.  The market’s clear rejection in Mar of the upper-quarter of this range as well as the bearish factors cited above reinforce a longer-term bearish count.  Relatively subdued bullish sentiment would seem to suggest the market might be a little vulnerable to higher levels.  But as a direct result of the past week’s rollover, we have precise and objective levels at 93.74 and especially 94.42 to neutralize bearish exposure and consider bullish punts.  Until and unless such strength is proven, we believe this market to be vulnerable to potentially sharp losses to the 91.00-area or low straight away.

These issues considered, a bearish policy remains advised with a recovery above at least 93.74 and preferably 94.42 required to negate this call and warrant defensive measures.  In lieu of such strength, further and possibly sharp losses are expected.

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.