General:Last week's recommendation to sell into any rally would have worked, but I admit, I was not expecting Friday's counter rally above 180. Still, the down trend (correction) remains in place and today's fall off helps, but does not guarantee further decline. To clean up the overall picture I have attached a point of figure chart. The choppy action off the high strengthens the correction argument. The fact that it has held the 45 degree downtrend line helps. The second leg of the correction is an exact 1:1 multiple of the first leg (tgt was 171.60). The entire move is contained by the channel line (see 60 minute chart). Barring a close above 186.5, I would expect further declines of the next few weeks. Expectation is that we are range bound between 150 and 195 for some time ( I know, lots of room for error..but I do think it will touch those points). How certain? 70 % range bound, 10 % we break above 200 this year and 20 % we break below 150. Long term, expecting to see substantial new highs next year.
Trade: Sell any rally with a stop above Friday's high (182.95). Or more aggressive, 186.50. However, I would still be looking to buy this below 170.
Key technicals: Broken uptrend, Weekly sell on the slow stochastic. Daily slow stochastic, however, nearly issuing a sell ...nearly.
Outside Mkts: Real below 1.67 and pushing towards 1.66 - bullish/supportive coffee. Commodities in general rallying. US dollar weak in general allowing for more risk-trade.
Open interest: generally bearish, despite large fund liquidation.
Point and figure chart: Critical point - trapped between several support and resistance areas.
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60 Min - uptrend broken and unable to re-enter, as of yet.
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Fund net Open Interest position: they spent a long time without increasing their position. I think fatigue set in and we will see further liquidation.
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Open interest - one of my crazier proprietary graphs, but it tends to capture general moves. Pointing down for the time being.
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