SOYBEANS: Given that ALL of the necessary waves for A POTENTIALLY COMPLETED, “wave-(3)advance” from the Feb 6 low ARE now pretty much “in place” in the beans, AND prices have now also reached our next higher area of what should be GOOD RESISTANCE AT 10.68-10.74 IN THE NEARBY CONTRACT, AND/OR ABOUT 10.78 1/2-10.84 1/2 BASIS MAY, larger traders may have taken PARTIAL profits on longs? If we are indeed close to finishing a “wave-(3)advance”, then traders will hopefully soon have a chance to REPLACE THESE LONGS, AFTER we see a “wave-(4) decline”, of A SIMILAR NATURE to that of the Jan 30-to-Feb 6/”wave-(2)correction”. Since this setback could’ve actually started on EITHER Jan 30, OR on Jan 25, however, IF an “Irregular Flat” occurred, the “wave-(4)DROP”...COULD LAST ANYWHERE BETWEEN ABOUT 4 1/2-TO-8 TRADING DAYS. As far as THE OPTIMUM BUY-ZONE is concerned, current projections suggest that the closest area of good support that would equate to a decline SIMILAR to that of the “wave-(2) pullback”...WOULD BE AT ABOUT 10.37-10.29 3/4 IN THE NEARBY CONTRACT, AND/OR ABOUT 10.48-TO-10.40 1/2 BASIS MAY ,i.e., the ideal area to RE-ENTER LONG. It should be duly noted, however, IF a strong close-above this key resistance occurs first, then we could certainly advance to either of our TWO NEXT HIGHER RESISTANCE AREAS...AT 11.02-11.05 AND/OR 11.20 1/2-11.38 NEARBY, AND/OR 11.13-11.17 AND/OR 11.31 1/2-11.49 BASIS MAY ,i.e., BEFORE we actually witness a larger, “wave-(4)decline”? In any event, UNTIL the nearby contract has at least reached the 11.20 level, AND a “wave-(4)drop” has been followed by a “wave-(5)rally”, THE PATTERN WILL REMAIN BULLISH! There’s also some resistance for MAY at 10.97-11.02 1/2, with the near-term support at 10.69-10.67(good) and 10.59.
CORN: Since the up-move in corn HAS now reached our MINIMUM,LONG-TERM OBJECTIVE AT 3.80-3.86 IN THE NEARBY CONTRACT, AND/OR ABOUT *3.89-TO-3.95 BASIS MAY, I imagine we’ll at least see A MODERATE PULLBACK? Note, because this area incorporates the “14.58%-61.8%-retracement combination” from the 2012 and 2016 highs, the “61.8%-times [a]-[b]-[c]”, AND “161.8%-times wave-[a]” projections, as well as numerous “appreciations” from past lows, it would be the OPTIMUM LEVEL for a “wave-(3)HIGH”. Overall, however, because we still need to see ABOUT A 1/2-WEEK, “wave-(4)decline” (at some point?), AND THEN AT LEAST ONE MORE SIZEABLE ADVANCE, OR “wave-(5)”, it currently looks like we’ll end-up GETTING PAST this resistance area. In which case, IF it is indeed possible to label A COMPLETED, “(5)-wave/[c]-wave rally” off the December 2017 low...when the nearby contract REACHES OUR OPTIMUM OBJECTIVE AT THE 3.94 1/2-4.06 1/2 LEVEL, then we’ll have to STRONGLY CONSIDER GOING SHORT AND/OR HEDGING. It should be duly noted, however, IF that “juncture” DOES NOT give-way to a bearish, “5-wave decline”, AND/OR another move-up to new rally highs follows, then the pattern will indicate that the FINAL, “wave-[c]advance” from the Dec low IS going to produce A LARGER, “(9)-wave extension”. In this event, we’ll likely attempt to RE-TEST the 2016 top at 4.39 1/4, with a move to OUR ORIGINAL TARGET AT 5.08-5.19 1/2 POSSIBLE. Support for MAY is at 3.84 1/4-3.80 3/4 (good), 3.75-3.74 1/4(good/best?), 3.69 1/4-3.68 (good/max?) and 3.63 1/2.
WHEAT: While there’s still A VERY SLIGHT CHANCE that a sizeable,1-month plus, “wave-(b)DECLINE” could “interrupt” the larger advance from the Dec 2017 low, recent “developments” have all but NEGATED this possibility. In essence, because the advance-off the Dec 2017 low has produced A FANTASTIC-LOOKING, “Impulse-Pattern”, it certainly possesses ALL of the characteristics of a larger, “[c]-wave rally”...NOT an “[a]-wave”. In which case, the MOST LIKELY scenario here is that this market will MAINTAIN A GOOD, UP-TRENDING PATTERN; UNTIL the entire advance from the Dec 2017 low HAS FINISHED. To that end, since this count further implies that we WON’T SEE A DROP IN EXCESS OF ABOUT 6-TO-9-TRADING DAYS, AND/OR ABOUT 22-TO-30-CENTS...UNTIL WE’VE AT LEAST TAKEN-OUT the 2017 high at 5.53 ½, it obviously looks like we still have some DECENT, UPSIDE POTENTIAL. In fact, as outlined in the Feb Quarterly Report, based on the close proximity of A LOT of different projections, it looks like THE MINIMUM/BEST UPSIDE TARGET FOR “wave-[c]”...IS AT 5.79 3/4-5.89 1/2 IN THE NEARBY CONTRACT, AND/OR ABOUT 5.87 3/4-5.97 1/2 BASIS MAY. This KEY AREA yields the “23.6%-38.2%-retracement combination from the 2008 and 2012 highs, the “EQUAL WAVES [a]-and-[c]” projection, AND “appreciations” of 61.8% and 50% from the 2017 and 2018 lows. Anyhow, IF it’s possible to label A COMPLETED, “[c]-wave rally” from the Dec 2017 low...when this area is reached, then we’ll look to TAKE PROFITS AND MAYBE SELL/HEDGE? Near-term resistance for MAY is at 5.04 3/4-5.09 1/2 (good) and 5.20 ½, with support at 5.04, 4.96-4.92(key), 4.81 ½-4.79 and 4.69.
COTTON: Given that the up-move from the Feb 15 low in MAY cotton looks MORE LIKE a “bullish-five”, as opposed to a “bearish-three” (so far?), my guess is that AFTER the next multi-day pullback finishes, we’re going to see at least one more shot-up to new rally highs. At which point, one heck of “CRITICAL JUNCTURE” could be at hand! At that point, as long as the nearby contract HOLDS the Jan “continuation chart” high at 84.65, then our Preferred Count will continue to indicate that we’ve ONLY been in a “wave-(2)correction”. In which case, we’ll presumably want to RE-ENTER SHORT, as the stage should then be set for A POWERFUL, “wave-(3)-of-Primary wave-[c]DECLINE”! Given this scenario, a relatively STEADY DOWNTREND is apt to remain in force...UNTIL WE’VE REACHED OUR OPTIMUM TARGET AT THE 51.76-51.02 LEVEL. However, IF the nearby contract FIRST EXCEEDS the Jan high at 84.65, then producers may want to LIGHTEN-UP on their hedge. In essence, while we WON’T actually confirm a substantially larger advance here, UNLESS we also take-out the May 2017 top at 87.18, a move-over 84.65...WILL IMPLY that this IS going to happen? Near-term resistance is at 84.31-84.50(max?), with support at 82.57-82.37(key), 81.51 and 80.56.
HOGS: Although it sure looked like we had a bullish, “5-wave rally” off the Feb 16 low in the APRIL hogs, AFTER Wednesday’s “penetration” of that low, we have presumably confirmed that an “Irregular Flat Advance” from the Feb 12 bottom gas occurred instead?. In which case, while this DOES NOT look all that positive in the APRIL contract, THE MORE IMPORTANT, “continuation chart” pattern implies that we’re now in A FINAL, “wave-c drop”, within a larger, “(x)-wave decline”...from the Feb 5 peak. Thus, provided we DON’T see another drop to new sell–off lows, AFTER the next 1-day plus rally, our near-term count will REMAIN PRETTY BULLISH. If we are indeed close to an “(x)-wave low”, then the stage should soon be set for A SIGNIFICANT, “(a)-wave rally”. Based on current projections, it still looks like THE MINIMUM, UPSIDE TARGET WILL BE AT THE 75.90-76.30 LEVEL. However, IF another drop to new sell-off lows DOES OCCUR, after the next 1-day plus rally, then we’ll have to BE A BIT MORE CAREFUL here. If we’re actually in a “wave-(b)decline”, of the same-degree as the entire, Sept 2017-Feb 2018 advance, then we could remain in A DOWNWARD PATTERN FOR A FEW MORE WEEKS? Support is at 68.10, 67.25-66.70(best) AND 65.60(max).
ELLIOTT WAVE FUTURES MONITOR
STOCKS: Although there are numerous possibilities in terms of “how” our anticipated decline in the stocks market is going to play-out over the next few months, recent developments suggest that we HAVE RULED-OUT the Alternate scenario calling for “a final, wave-(5)advance”. Note, because the up-move from BOTH the Feb 6 and Feb 9 lows looks like A BEARISH, “(3)-wave” pattern, as opposed to a “bullish-five”, it’s highly likely that we have indeed been in JUST a “(b)-wave/corrective-rally”. In which case, the ONLY real area of “question”...now has to do with whether the Feb 27 high at 2789.75 has marked the END of the entire advance, OR just the initial, “a-wave”. Well, given that the initial decline looks a bit MORE LIKE a “bearish-five”, there’s probably BETTER THAN A 50%-CHANCE THAT A SUBSTANTIAL, “wave-(c)DECLINE”...HAS BEGUN! In which case, aggressive traders may want to GO LIGHTLY SHORT, as long as the next multi-day rally DOES NOT yield a “bullish-five” (which, HAS NOT occurred yet?). The “stop” on any short-position, however, may need to go ABOVE OUR CLOSEST AREA OF MAJOR RESISTANCE...AT 2756.75-2760.00? Near-term resistance is at 2691.50, 2711.50-2714.00(good), 2724.00, 2732.25 and 2744.25, with support at 2717.25, 2698.50-2693.50, 2679.25-2668.75, 2649.00-2644.00, 2624.50-2617.50 (good), 2599.25, 2586.75, 2559.00-2531.00(good/key!), 2599.25 and 2586.75.
SILVER: Since I CAN make a decent case for A COMPLETED, “wave-[e]DECLINE” from the Jan 25 high in the MAY silver; at the March 3 low of 16.16, AND this low also occurred right at the upper-end of our KEY SUPPORT AT 16.13-15.92 IN THE NEARBY CONTRACT,AND/OR ABOUT 16.17-15.96 BASIS MAY, we’re certainly interested in RE-ENTERING LONG here. Note, IF we can EITHER get a “5-up” from last week’s low, OR TAKE-OUT the Feb 26 high at 16.785, then we’ll probably CONFIRM THAT A MAJOR, “THRUST-WAVE RALLY”...HAS indeed begun. At this point, however, because the initial advance looks MORE LIKE A “bearish-three” (so far?), we’re going to HOLD-OFF on doing anything for now. As you know, IF a “bullish-five” DOES NOT develop from the aforementioned support-zone, then THE BEST COUNT will indicate that the decline from the Jan 25 high...IS actually going to produce A CONSIDERABLY LARGER, BUT FINAL, “wave-[c]DECLINE”. Given this interpretation, which could be strongly confirmed, IF the MAY silver now EXCEEDS the March 3 low at 16.16(?), we’ll presumably still need to trace-out waves “(3)-down”, “(4)-up” and then “(5)-wave down”. In which case, it’s conceivable that we’ll have an opportunity GO LONG NEAR OUR HUGE, LONG-TERM SUPPORT AREA AT 14.56-14.20 NEARBY, AND/OR ABOUT 14.60-14.24 BAS MAY. There’s also some support at 15.55-15.32, with the resistance at 16.40, 16.62-16.73 (key) and 16.89.
CRUDE OIL: In light of the potentially BULLISH,“5-wave rally” that has developed-off the Feb 9 low (57.90) in the APRIL Crude Oil, I suppose aggressive traders could attempt to LIGHTLY BUY the current setback; using A CLOSE-ONLY STOP(?)BELOW KEY SUPPORT AT 60.80-60.60? Given this “wave-position”, once the current setback ends, then we ought to see AT LEAST ONE MORE SHOT-UP to new rally highs (+64.24), BEFORE the stage will probably be set for ANOTHER SIGNIFICANT DECLINE. Of course, since there’s still A SLIGHT CHANCE that the Feb 9 low has actually marked the END of a “wave-(4)correction”, of the same-degree as the August 1, 2017-to-August 31, 2017/”wave-(2)decline”, I guess we could see A SOMEWHAT LARGER RALLY here? If we still need to trace-out a “wave-(5)ADVANCE”, then the APRIL Crude Oil could reach OUR MAX RESISTANCE AT THE 67.82-68.20 LEVEL ,i.e., BEFORE a substantial, “Primary wave-DECLINE” actually begins. Of course, for all of the reasons previously discussed, I believe a “Primary wave-DECLINE”...HAS ALREADY STARTED. Thus, I’m primarily interested in THE SHORT-SIDE, as the next drop will probably be PRETTY BIG. Resistance is at 62.05-62.40(good), 63.07-63.51(good), 64.62 and 65.55-65.89 (max), with support at 62.50, 61.69, 60.80-60.60(good/key!) 59.52 and 59.11-58.43(good).
COFFEE: Since the advance from the Feb 21 low in coffee has so far ONLY produced a “3-wave” pattern, the short-term count suggests that we’re probably STILL-IN A FINAL, “wave-[c]DECLINE”...from the Aug/Sept 2017 highs. The reason it’s taking so long to finish, however, may have to do with the development of a “Diagonal Triangle”? Which, would certainly explain the never-ending series of “(3)-wave” movements in both directions over the past 6-months. Anyhow, if this interpretation is correct, then, at some point in the next few weeks, we will need to trace-out A FINAL, “wave-(5)-of-[c]DECLINE”. To that end, since this count implies that the nearby contract will at least TAKE-OUT the Feb “continuation chart” low at 116.50, my guess is that THE MINIMUM/BEST BUY-ZONE WILL BE AT ABOUT 116.40-TO-116.10 IN THE NEARBY CONTRACT. Which, currently EQUATES TO ABOUT 118.05-117.75 IN THE MAY COFFEE. This area yields the mid-point between our two next best “retracement” projections, as well as the lower boundary-line from the “Diagonal Triangle”. Of course, it’s also possible that we could end-up RE-TESTING the same key support that produced the June 2017 low at 113.00; ACTUALLY AT ABOUT 114.75-113.65 NEARBY, AND/OR ABOUT 116.40-115.30 BASIS MAY? Resistance is at 122.45 and 123.80-124.80(good/key?).
COCOA: Considering that the up-move from the June 2017 “continuation chart” low in cocoa (1770) has now EXCEEDED BOTH OUR KEY RESISTANCE AT THE 2255-2299 LEVEL, AND THE “DURATION” of the 2016, “Primary wave-advance”, I guess we have indeed NEGATED our “Preferred Count”? In which case, since the ONLY other interpretation that makes any sense here indicates that we’ve FINISHED a larger, “A-B-C DECLINE” from the 2011 top, we could be in an advance that’s at least of the same-degree as the 2011-to-2015 rally? Thus, as long as the next 1-week plus decline does NOT result in a “bearish-five”, I will probably go ahead and “adopt” this scenario...as the NEW, “Preferred Count”? That said, however, because we DID have an “extra advance” back at the 2015 top...that SHOULD NOT have occurred, I’m still NOT strongly convinced that this rally is the “real deal”? Resistance is now at 2428, 2471-2489 (very good) and 2541-2555, with support at 2451-2434, 2372-2343(good), 2308-2293 and 2253-2250.
NEW TRADES AND OPEN POSITIONS 03/06/18
SOYBEANS: HRT are long MAY beans at 10.45(+$4,262 w/rlvr).RAISE the stop to 10.24.
WHEAT: HRT are long MAY wheat at 4.66(+$2,800 w/rlvr). Keep the stop at 4.77.HOGS: HRT are long the APRIL hogs at 67.27(+$610). RAISE the stop to 65.37.
DISCLAIMER Futures 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.