SOYBEANS: Since it’s certainly possible that the nearby May beans could reach our MINIMUM, LONG-TERM TARGET AT 9.57-TO-9.87, BEFORE we see a larger setback (that’s in excess of about 2 1/4-trading days?), it’s a bit of a “coin-toss” as to whether or not we should look to TAKE PARTIAL PROFITS ON LONGS here? Note, because I do show PRETTY GOOD, INTERIM RESISTANCE AT THE 9.20 1/4-9.32 LEVEL, my current “guess” is that there’s BETTER THAN A 50%-CHANCE that this area will mark the END of a completed, “five-wave rally” from the March 2 low? Thus, since this particular juncture could end-up being quite “critical”, I’m inclined to go ahead and try to take at least partial profits NEAR THE 9.26 LEVEL. In essence, whenever we actually HAVE CONFIRMED A COMPLETED, “five-wave rally” off the March 2 low, which will probably require A DROP IN EXCESS OF 2 1/4-TRADING DAYS, then the “action” that immediately follows...WILL BE VERY IMPORTANT. If we happen to witness a sharp, “five-wave decline”, OR KEY SUPPORT AT ABOUT 8.85-8.81 IS EXCEEDED, then we’ll have to figure that the entire “Primary wave-advance”...could’ve FINISHED? In which case, the stage could be set for a final, “Primary wave-DECLINE”...TO AT LEAST THE 8.32-8.06 ½ LEVEL? It should be duly noted, however, because this would still represent A VERY SMALL CORRECTION, as compared to all of the other larger rallies since the 2012 top, AND IT APPEARS HIGHLY UNLIKELY that we’ve hit significant tops in either the corn, or wheat, I still think the FAR MORE LIKELY SCENARIO IS THAT WE’RE ONLY IN THE INITIAL, “wave-1 section up” here. In which case, as long as the next 1-week plus pullback DOES indeed produce a “bullish-three”, traders should have another GOOD BUYING OPPORTUNITY. Under our Preferred Count, once a larger, “wave-2 drop” ends, then the stage should be set for the OFTEN DYNAMIC, “wave-3-of-[c]ADVANCE”. In which case, by the time waves “3-up”, “4-down” and “5-up” complete, our MINIMUM TARGET WILL PROBABLY STILL BE BETWEEN 9.57-AND-9.87, WITH THE BEST OBJECTIVE AT 10.24-10.46 3/4. Support is at 9.08 1/4, 9.02, 8.97 ½-8.94 ½(good), 8.85-8.81(good/key) and 8.72 3/4-8.70(max?), with resistance at 9.13, 9.20 1/4-9.32(good/key) and 9.41 3/4-9.44(good).
CORN: Given that the “wave-progression” from the July 2015 high in corn (4.38 3/4) continues to produce higher-lows, and lower-highs, within a rather obvious, “Contracting” formation, it certainly looks like we’ve been in A BIG “Triangle”. In which case, since “Triangles” almost always occur in a position that’s JUST PRIOR TO THE FINAL MOVEMENT IN THE DIRECTION OF THE LARGER TREND, the strong implication here is that A BIG, BUT FINAL-MOVE is about to occur! The obvious question, however, is which way? Well, in theory, if corn prices happen to VIOLATE the Jan low at 3.48 ½, then the “Thrust-Wave” could occur on the DOWNSIDE. In which case, BEFORE a long-term low is hit, prices could reach our long-range TARGET AT 2.92-2.88? However, because this count ONLY WORKS, IF the Oct 2014-to-July 2015 rally completed JUST the “[a]-wave section up”, with all the rest of the “waves” occurring between Aug 2015-and-Mar 2016, I find this scenario HIGHLY UNLIKELY. Thus, when you also factor-in the seemingly BULLISH PATTERNS in both the beans and wheat, it certainly looks like the “Thrust-Wave Rally” in the corn...WILL OCCUR ON THE UPSIDE! In which case, assuming we can GET PAST GOOD RESISTANCE AT 3.77 1/2-3.80 1/4 PRETTY SOON, A RATHER BULLISH, intermediate-term position ought to be at hand. Based on the proximity of the “Thrust-Wave Projection”, AND numerous other calculations, this scenario continues to yield A MINIMUM TARGET AT 4.39 3/4-4.44, WITH THE BEST OBJECTIVE AT 5.15-5.19 ½? Support is at 3.71, 3.66-3.65, 3.60-3.58(good), and 3.55, with the resistance at 3.72, 3.77 1/2-3.80 1/4(good/key) and 3.87.
WHEAT: Since the March 2-March 14 rally in May wheat resulted in A BULLISH, “five-wave” pattern, AND the setback from the March 14 high continues to display a corrective-looking, “a-b-c”, it seems like a near certainty that prices will soon AT LEAST stage a test of the 4.79 ½ high. At which point, if an immediate, “five-wave drop” happens to follow, then I would get a bit “nervous” towards our bullish-count. With that said, however, considering that the ONLY VIABLE, long-term count continues to strongly indicate that the March 2016 continuation chart low at 4.35 1/4...HAS MARKED THE END OF A HUGE, “A-B-C DECLINE” from the 2008 all-time-high, I believe the far more likely scenario here is that we’re currently in just a “wave-(2)correction”. In which case, since this count indicates that the next advance will actually be a potentially POWERFUL, “wave-(3)-of-Primary wave-[a]”, aggressive traders may want to ADD ANOTHER LONG-POSITION here? Given this scenario, our projection analysis indicates that THE MINIMUM OBJECTIVE for just the “wave-(3)section up”...IS AT 5.06-5.10. However, by the time a “wave-(4)pullback” is followed by a “wave-(5)advance”, prices ought to at least achieve our NEXT BIG RESISTANCE CLUSTER AT 5.53 3/4-5.57 3/4. Once this area has been reached, however, then we could be at a rather IMPORTANT JUNCTURE. At that time, if it’s possible to label completed advances in BOTH the corn and beans, then we’ll have to figure that the wheat could also see A SUBSTANTIAL DROP. Although, I DON’T expect wheat to take-out this year’s 4.35 1/4 low. In the event 5.57 3/4 IS EXCEEDED, however, then wheat prices could “blow-off” to either of our two next higher resistance areas at 6.30 3/4-6.40 AND/OR 7.50-7.58? Support is at 4.73-4.70, 4.63-4.59 (good/best?) and 4.49-4.47 ½(max), with near-term resistance at 4.74 ½-4.76.
COTTON: Considering that the Jan-August 2015 rally in cotton ONLY RETRACED A MEASLY 7%-OF THE HUGE DECLINE from the 2011 high, AND the current patterns in ALL the grains look pretty bullish (so far?), it’s hard to see a highly bearish pattern in the cotton. However, because IT IS possible to label A COMPLETED, “Double-Three Advance” in the May contract, AND a completed, “Single-Three” on the continuation chart; at the March 17 high of 58.89, it looks like we’re about to find-out the correct count. IF prices can hold fairly close to the low-end of KEY SUPPORT AT 58.35-57.05, AND/OR the 58.89 high IS VIOLATED, then our “Bullish Count”...should be RE-CONFIRMED. In which case, our eventual, UPSIDE TARGET SHOULD BE AT 80.64-81.42. However, IF the current drop produces a “5-wave” pattern instead, OR we see another close much BELOW 57.05, then we may have to “throw-in the towel”? In this event, we may have to conclude that A BIG,“SC-WAVE-(A)DECLINE”...is still in force. In which case, while support at 52.18-51.55 may hold for now, the LONG-TERM TARGET WILL BE AT 46.29-43.40.
HOGS: While the development of a “5-wave rally” off the Nov 2015 low in hogs IS QUITE BULLISH from an intermediate-term standpoint, the short-term pattern has reached a rather “pivotal” position. IF the overall advance is going to produce a significantly larger, “(9)-wave extension”, which IS my slight preference, then prices should turn back up in a “five”...now! If so, then April hogs should quickly reach our NEXT STRONG RESISTANCE AREA AT 74.17-74.65, with the eventual objective at 83.15-83.80. In the event we DON’T see a near immediate, “five-wave rally”, however, OR a drop to new sell-off lows occurs AFTER THURSDAY, MARCH 24, then the best count will indicate that we’re actually in a larger, “wave-(2)DECLINE”, of the same-degree as the entire Nov 2015-March 2016 advance”. Given this interpretation, while I do think prices could still HOLD BIG SUPPORT AT THE 67.55-66.95 LEVEL, our “time” analysis indicates that it would probably take AT LEAST ANOTHER COUPLE WEEKS...BEFORE we’d be able to hit the “Orthodox” bottom? There’s also support at 69.85-69.60 and 68.95-68.82 (good), with the resistance at 70.65-70.75, 71.17-71.57(key) and 72.67-73.12.
ELLIOTT WAVE FUTURES MONITOR
STOCKS: Although we could get A SIGNIFICANT, “timing sell-signal” in the June Mini S&P; IF a drop to new sell-off lows occurs AFTER WEDNESDAY, MARCH 30, the initial decline off last week’s high HAS NOT produced a “bearish-five” (yet?). Thus, for now, I think the most likely scenario is that we’ve only been in a “wave-8" correction. In which case, once a FINAL, “wave-9 ADVANCE” to new rally highs has been traced-out, then we’ll be looking to GO SHORT. At that time, IF we see BOTH a “five-wave drop”, AND a decline that lasts for MORE THAN 6-TRADING DAYS, then we’ll presumably be able to make a strong case for A COMPLETED ADVANCE off the Jan bottom. At which point, depending on the actual high, the stage should be set for A FINAL DECLINE...PRESUMABLY YIELDING A DROP TO AT LEAST THE 1744.00-1726.50 LEVEL ,i.e., BEFORE a major upturn actually occurs. On the other hand, however, if the next 6-TRADING DAY PLUS DECLINE either does NOT result in a “five-wave” pattern, OR another move-up to new rally highs follows, then the odds of “a big and final decline” anytime soon...WILL DECREASE DRAMATICALLY. Once the 2015 high at 2134.00 is exceeded, however, then another “bearish” position could be at hand? Resistance is at 2027.25, 2034.25-2041.00(good), 2055.75-2066.50(good/best?) and 2075.50-2085.50(max?), with the support at 2027.00-2026.50, 2015.25-2014.25(good/pivotal), 1996.75-1991.50, 1981.25-1974.50 (good), 1960.75-1956.50(good) and 1941.75-1938.25.
SILVER: Since the March 18 high at 16.17 in the May silver occurred within a few-cents of our HUGE RESISTANCE AREA AT 16.22-TO-16.39, which includes the KEY, Oct 2015 high at 16.37 (cont. chart), AND the 27.25%-7.29%-retracement combination from the 1980 and 2011 highs, it continues to look like A VERY PIVOTAL-POSITION is at hand! IF a “five-wave decline” DOES follow, which will require another drop to new sell-off lows...AFTER the next 1-to-2-day bounce, then our SLIGHTLY PREFERRED, BEARISH COUNT SHOULD BE RECONFIRMED. In which case, prices should now be headed for AT LEAST the same good support area that produced the Dec 2015 low; ACTUALLY AT 13.65-TO-13.39. However, because the pattern in the gold market indicates that we’ve ALREADY HIT A MAJOR BOTTOM, we have to figure that our count in the silver could be wrong? Thus, if the drop from the March 18 high FAILS to produce a “bearish-five” here, then we may have to conclude that the silver has also FINISHED A “CYCLE”, OR “SUPER-CYCLE-WAVE-(A)DECLINE” FROM THE 2011 HIGH. Which, would mean that A MAJOR ADVANCE, OF THE SAME-DEGREE as the entire 2011-2015 drop...is under way. Near-term resistance is at 15.435-15.62(good) and 15.86-15.95, with the key support at 15.16-15.04.
CRUDE OIL: Given that we’ve now CONFIRMED A COMPLETED, “three-wave rally” off the Jan low in the May Crude Oil; at the March 18 high of 42.49, it looks like we’re about to find-out which of our two counts is correct. IF a “five-wave decline” occurs initially, which will require another drop to new sell-off lows; AFTER the next minor, 1-to-2-day bounce, then our original scenario of a “wave-(4)PEAK”...will probably be RECONFIRMED. In which case, A FINAL, “wave-(5)DECLINE” will presumably occur in conjunction with A FINAL DROP to new lows in the Stock Market. Based on current projections, it continues to look like the OPTIMUM, DOWNSIDE TARGETS FOR THE CRUDE WILL BE AT 24.81-24.52 AND/OR 21.98-21.50. However, IF we either DON’T end-up getting a “five-down” here, OR the 42.49 high is VIOLATED, then our main focus will SHIFT TO THE LONG-SIDE. In this event, the best count will likely indicate that we’ve FINISHED A BIG, “A-B-C DECLINE” from the 2008 high. In which case, the most bullish-position since at least LATE 2008 should be at hand! Support is at 40.13-39.67(good), 37.61-37.44(good) and 35.51, with resistance at 40.05-40.47 and 42.15-42.37.
COFFEE: Since we’ve now CONFIRMED A COMPLETED, “3-wave rally” off the Jan low in the May coffee; at the March 23 high of 136.40, developments over the next week or so...should be “telling”. If the initial drop produces a “bearish-five”, which IS NOT the case thus far, then I guess we could see another drop to new lows (-111.05). However, because the “size” of the Jan-March rally suggests that we’ve ALREADY COMPLETED A “SC-WAVE-(C)DECLINE” from the 2014 top; at the Jan low of 111.05, we’re looking to BUY. If this count is right, AND we’ve actually completed a “Bear Cycle” from either the 1977, or 1997 high, then we should’ve reached THE MOST BULLISH WAVE-POSITION IN AT LEAST 19-YEARS; IF NOT 39-YEARS! Anyhow, BEFORE we attempt to go long, I’d like to see a small, “wave-b bounce, and then a “wave-c drop”. Near-term resistance is at 130.25-131.00, 132.15-132.95(good), 135.45-136.00 and 137.25-138.35(good), with the support at 129.00-128.15, 126.05-125.75(good) and 123.30-121.50 (good/max?).
COCOA: While there’s A MODERATE CHANCE that the March 18 high in May cocoa has only marked the end of AN INITIAL, “wave-(a)”, which would mean that we’ll eventually need to trace-out a final, “wave-(c)advance”, that peak (3149) DID OCCUR RIGHT AT OUR BIG 3130-3165 RESISTANCE AREA. Thus, given that the initial decline from that high has also produced A VERY CLEAR, “five-wave” pattern, we want to try and sell the first 1-day plus rally (which, may be under way now). Note, after the next 1-day plus advance finishes, then we’ll need to see at least ONE MORE SHARP DROP to new sell-off lows. At which point, a rather “pivotal” position might be at hand? At that time, however, we’ll hopefully be able to LOWER the stop to a small profit, just in case we do need to stage “a final, wave-(c)advance”? Resistance is at 2996-3026(best) and 3086-3097(max?).
NEW TRADES AND OPEN POSITIONS 03/29/16
BEANS: HRT are long the May beans at 8.83 1/4(+$1,212 w/rlvr). Keep the stop at 8.76 3/4, AND also attempt to take profits at 9.26.
CORN: Traders are long May corn at 3.71 ½($= w/rlvr). Keep the stop at 3.48.
WHEAT: HRT are long May wheat at 4.49 3/4 (+$1,062). RAISE the stop to 4.55.
COCOA: HRT can sell the May cocoa at 3019, using a stop at 3115.
DISCLAIMERFutures and Option trading involves substantial risk and is not a suitable investment for all types of investors. This Futures Market Report is strictly the opinion of its writer. Information is obtained from sources believed reliable, but is in no way guaranteed. The author may have positions in the markets mentioned including at times positions contrary to the advice quoted herein. Opinions, market data and recommendations are subject to change at any time. Past performance is not necessarily an indicator of future performance. Prices displayed in this written update were taken from real-time price quotes that took into account all known activity up to the point in time the price displayed was quoted. Brent Harris is registered as an Associated Person of Southwest Futures, Inc.