While today’s poke above the past month-and-a-half’s 14.28-to-14.33 highs and resistance hardly constitutes a “bust-out”, it nonetheless renders any recent sell-off attempt a corrective affair and re-exposes the secular bull trend. For instance, this relatively small resumed strength confirms the late-Feb setback from 14.28 to 13.87 as a complete correction of “some” smaller-degree scale. Per such, this market is now obligated to fail below at least 13.87 to negate this shorter-term bullish wave structure and throw the market back into the 14.33 – 13.05-range that has engulfed it the past month-and-a-half and defer pr threaten a more immediate bullish count. Until and unless such sub-13.87 weakness is proven, the secular bull trend has arguably resumed ahead of further and possibly steep, accelerating gains. In this regard, this 13.87 level serves as our new short-term risk parameter from which shorter-term traders with tighter risk profiles can objectively rebase and manage the risk of a resumed bullish policy that was put on hold following 20-Jan’s bearish divergence in short-term mo.
From a longer-term perspective, it remains clear in the daily log scale chart below that commensurately larger-degree weakness below 22-Jan’s 13.05 Globex day-session low remains MINIMALLY required to break the major uptrend from last Apr’s 8.24 low. This is a technical fact. Any weakness shy of 13.05 would be of an insufficient scale to conclude anything more than another interim correction within the still-unfolding major bull. Per such, this 13.05 level remains intact as our key long-term risk parameter pertinent to commercial players like end-users and producers.
From a geeky Elliott Wave perspective, might the market be completing a 5th-wave “somewhere in here”? Sure, no question. But we can’t even begin to speculate on that until and unless this market starts failing below recent corrective lows like 13.05 and even 13.87. Trying to “label” the rally from last Apr’s 8.24 low, let alone have any confidence in each wave’s scale or degree is a futile exercise. We’ve labeled our prospective count, but take this with the grain of salt it deserves. What’s most important “up here”, especially against the backdrop of understandably historically frothy bullish sentiment levels typical of major peak/reversal environments, is MOMENTUM. And when this market finally does start failing below recent corrective lows, we’re going to be much more concerned about the combination of such a mo failure and the extent to which the huddled masses have their necks sticking out on the bull side; not whether or not that last wave up was THE 5th-wave of a major degree or some smaller degree.
In the monthly log chart below, we’ve circled in pink the consolidations that precede the final gasp (5th-wave) rallies that are typical of all major peak/reversal processes. The mere lateral chop from mid-Jan’s 14.33 high to perhaps 18-Feb’s 13.71 low (and possible end to a lateral 4th-Wave triangle) cannot be ignored as exactly the type of slowdown that precedes the final gasp higher. But what the bull has remaining in the tank is not the issues here. Indeed, the prospective 5th-wave could have miles to go. The crucial takeaway from today’s rally are the corrective lows left in its wake at 13.05 and even 13.87. These are the levels this bull must absolutely sustain gains above to remain in charge. Until and unless the market falters below these levels, the trend is up on all levels and should not surprise by its continuance or acceleration. There’s no way at this juncture to know how high “high” is.
These issues considered, a bullish policy and exposure remain advised for long-term players with a failure below 13.87 required to pare exposure to more conservative levels and commensurately larger-degree weakness below 13.05 to jettison remaining exposure altogether. Shorter-term traders with tighter risk profiles remain advised to maintain a bullish policy and exposure from 14.00 OB with a failure below 13.87 required to negate this specific call and warrant its cover. In lieu of at least such sub-13.87 weakness, further and possibly accelerated gains should not surprise with former 14.25-to-14.15-area resistance considered new near-term support.
