SHORT-TERM (today 5 days out)
Please note today’s letter begins August 2016 contract analysis. For Friday, 46.42 can contain session weakness (assuming an open above), 47.55 in reach and likely to contain initial strength, beyond which 48.40 is attainable intraday – likely to contain session strength. A settlement today above 48.40 signals 50.14 within 1-2 days, able to contain strength through next week and below which the 45.04-25 region has remained a 3-5 day target. Closing above 50.14 indicates a good June low, 55.05 then expected over the following 1-2 weeks. Downside Friday, breaking/opening below 46.42 signals 45.74, able to contain initial selling yet below which 45.04-25 becomes an intraday objective able to contain selling through July activity. Holding above 45.04 maintains a long-term buy signal into later year (page 2), while a weekly settlement today below 45.04 would be considered buy-signal-failure, essentially a valid sell signal over the next several weeks into the 39.33 region, likely lower into later summer.
MID (2-3 wks) & LONG TERM (2-3 ms )
The 45.04-25 region can absorb selling through the balance of the year, above which a long-term buy signal remains in effect, 57.30 expected over the next 5-8 weeks, 63.14 within several months, the next 5-8 months likely to yield 69.71–74.12, a narrowing range of longterm resistance likely to contain annual buying pressures when tested (page 2). On the other hand, a settlement below 45.04 would be considered a failed long-term buy signal, essentially a valid sell signal through summer trade, 39.33 then expected within several weeks, last February’s 26.05 low expected within 3-5 months
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