No change in the bearish view $ index, as the Jan high at 81.80 is still seen completing the upmove from the Oct low at 74.75 (and potentially the whole upmove from the May low at 74.75), and with at least another month (and potentially more, see longer term below) of downside ahead. Note that the upmove from Oct lasted nearly 3 months while this correction has lasted about 3 weeks so far, and does not appear to have been long enough "time-wise", while technicals remain negative (see sell mode on daily macd at bottom of daily chart below), and with both adding to the view of further, big picture downside ahead. But on a short term basis, the market is near term oversold after the last few weeks of sharp declines, and suggests that risk is starting to rise for a week or 2 of consolidating and 150 tick bounce, before resuming the decline. Also the market is nearing potentially important support at 78.20/35 (both a 38% retracement from the May low at 72.70 and a 50% retracement from the Oct low at 74.75), raising the risk that further, near term downside may be limited. Still short from the Jan 20th sell at 80.25, and would now use a more aggressive stop on a close above the bearish trendline from the Jan high (currently at 79.45/55) to compensate for the rising near term risk, and in turn maintain a good overall risk/reward in the position.
Longer term also no change, as the market continues to form a huge pennant/triangle for over the last 6 years. Still view an important bottom at the May low at 72.70 (base), and with eventual gains toward the ceiling favored (currently at 87.25/50). However, with the market overbought after the gains from that May low, at least another few weeks (and likely longer) of downside is favored first (see in red on weekly chart/2nd chart below). Note that there is some potential for declines all the way back to the base of the large triangle (currently at 73.00/25), but that much of a pullback is not currently favored. Support before there is seen at 78.20/35 (38% retracement from the 72.70 low) and 77.15/30. So for now, would maintain the longer term bearish bias that was put in place on Jan 20th at 80.25.
