Brent Harris Elliott Wave
Futures Market Advisory Service

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Cotton (Oct. 10, 2005)

While the long-term pattern in cotton clearly indicates that a SUPER-CYCLE-WAVE-(C) decline will eventually at least re-test the 2001/(A)-wave low (28.20), it is virtually impossible (?) to make a case for a completed, wave-(B) “corrective” rally. Consequently, whether it happens now, OR after one more moderate-sized decline, a FINAL, wave-C advance to AT LEAST the 76.98-78.55 level should occur, i.e., BEFORE the long-term Bear actually resumes. This key resistance area yields the 56%-85.4%-retracement combination from the 1995 and 2003 highs, appreciations of 176.4%-and-85.4%-from the 2001 and 2004 lows, as well as a wave-C advance that is 61.8%-the length of wave-A. Anyhow, given my slightly preferred, intermediate-term count, the advance from the August low should hold key resistance at the 55.22-55.70 level. This area incorporates the 30.9%-retracement projections from BOTH the 1995 AND 2003 highs. At which point, a FINAL, wave-c decline should re-test the key 76.4%-85.4%-retracement/support combination from the 1986 and 2001 lows, or 42.30-to-41.55. There is a slight chance, however, that [wave-(c)] will stretch to the MAXIMUM support cluster, at 37.48-36.46. This area yields the 90.9%-85.4%-retracement combination, as well as a 56%-depreciation from the 2003 top. Given the ALTERNATE WAVE-COUNT, however, which will likely be confirmed IF the nearby futures contract closes ABOVE 55.70, we’ll have to figure that the FINAL, wave-C section up is already underway. In this event, we’ll probably see a 5-wave-pattern-up develop from the August continuation chart low, with waves-1-and-3-up probably peaking at the 62.20-63.40 and 72.70-74.70 resistance areas, respectively. In other words, we should have a good opportunity to go long (especially) on a pullback from the 62.20-63.40 resistance level, i.e., wave-2-of-C.

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