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 10.47 1/2-10.40 1/4 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 11.12 ½-11.16 ½ AND/OR 11.31-11.48 ½ 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 resistance (MAY) at 10.96 ½-11.02, with the near-term support at 10.68 1/2-10.66 1/2(good) and 10.59.
CORN: Since the short-term pattern in corn suggests that we’re probably now WITHIN ONE MINOR ADVANCE of potentially COMPLETING a “wave-(3)rally” from the Jan 12 low, AND prices have also reached KEY RESISTANCE AT 3.80-3.86 IN THE NEARBY CONTRACT, AND/OR ABOUT *3.88 1/2-TO-3.94 1/2 BASIS MAY, my guess is that a larger, “wave-(4)setback”...IS close to occurring? In which case, we could soon witness ABOUT A 7-TO-9-TRADING DAY DECLINE; of about the same-degree as the Jan 3-to-Jan 12/”wave-(2)pullback” via the “continuation chart”. IF said decline DOES occur from near current levels, then my guess is that THE OPTIMUM, DOWNSIDE TARGET FOR THE MAY CORN WILL BE AROUND THE 3.68 3/4-3.67 1/2 AREA? Since this scenario implies that the following, “wave-(5)advance” WILL TAKE-OUT the aforementioned resistance, however, I imagine will end-up reaching OUR BEST OBJECTIVE BETWEEN 3.94 1/2-AND-4.06 1/2. At which point, one heck of a “CRITICAL JUNCTURE” will be at hand! IF it’s also possible to label completed rallies in the wheat and beans at that time, AND/OR a “5-wave drop” occurs in the corn, then we could be looking at A VERY SIGNIFICANT TOP. However, IF it’s NOT possible to label completed rallies in the wheat and beans, AND/OR a “bearish-five” DOES NOT occur in the corn, then we’ll have to figure that we are we’re going to see A CONSIDERABLY LARGER, “(9)-wave EXTENSION”. Support is at 3.83 3/4-3.80 1/4 (good), 3.74 ½-3.73 4/4(good), 3.68 3/4-3.67 1/2(max).
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 5.85 3/4-5.95 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 5.02 3/4-5.07 1/2 (good) and 5.18 ½, with support at 5.02, 4.94-4.90(key), 4.79 ½-4.77 and 4.67.
COTTON: In light of this weeks’ “penetration” of BOTH the Jan 2018, AND May 2017 “continuation chart” highs at 84.65 and 87.18 in cotton, respectively, we’ve obviously NEGATED our bearish count...at least for now. In essence, while it’s a near certainty that the current up-move is ONLY a “corrective-wave”, I’m now UNABLE to make a case for a completed advance-off EITHER the Jan 2015, OR March 2016 low. Thus, while there are now a couple of DIFFERENT possibilities, my guess is that the setback from the May 2017 high actually ENDED at the October 2017 low; not at the July bottom. The implication of which, is that the May-to-October decline likely marked the END OF JUST a “wave-[b]correction”, as opposed to an initial, “[a]-wave drop” (which, was our original count). Anyhow, given this scenario, the Jan-Feb drop presumably completed ONLY a “wave-(2)correction”. In which case, since this implies that we still need to trace-out waves “(3)-up”, “(4)-down” and then “(5)-up”, I imagine prices will EASILY REACH THE NEXT BIG RESISTANCE AREA...AT ABOUT THE 96.09-97.35 LEVEL. Near-term resistance (MAY) is at 84.47-85.13, 86.44-86.77 and 87.51-88.37(good), with the support at 82.57-82.37 and 81.51-80.50(good/key).
HOGS: Since I CAN make a pretty good case for A COMPLETED, “a-b-c DECLINE” from the Feb 5 high via the “continuation chart”; at the March 1 low of 66.87 in the nearby APRIL hogs, AND that low also occurred right at OUR BEST SUPPORT LEVEL BETWEEN 67.25-AND-66.70, it certainly looks like we’ve FINISHED an “(x)-wave correction”. In which case, assuming a “5-wave rally” now also develops here (which, is undetermined so for?), the stage should be set for A SUBSTANTIAL, “wave-(a)ADVANCE”; probably yielding A BARE MINIMUM, UPSIDE TARGET AT THE 75.90-76.30 LEVEL. Traders should also note, however, that there is A SLIGHT CHANCE that the decline from the Feb 5 high going to produce a “Double-Three” INSTEAD. In which case, at some point between NOW-AND-EARLY FRIDAY, MARCH 9...WE COULD SEE ONE MORE DROP TO NEW SELL-OFF LOWS (-66.87). So, from a trading standpoint, our plan is to keep the stop on longs at a small profit. Then, IF we are stopped-out, we’ll be looking to RE-ENTER LONG NEAR OUR MAX SUPPORT AT 65.95-65.60. WE DON’T want a new low AFTER FRIDAY, MARCH 9, however. Near-term support is at about 68.10, with KEY RESISTANCE AT 69.45-69.55.
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 2711.50-2714.00(good), 2724.00, 2732.25 and 2744.25, with support at 2721.50-2717.25, 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: [SEE New Trades] Since I CAN make a decent case for A COMPLETED,”[e]-wave DECLINE” from the Jan 25 high in 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 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, we could have a chance to BUY NEAR OUR HUGE SUPPORT AREA AT 14.56-14.20 NEARBY, AND/OR ABOUT 14.60-14.24 BAS MAY. There’s also support at 16.63-16.42(good) and 15.55-15.32, with resistance at 16.73, 16.88-17.16(good/key?) and 17.40-17.59.
CRUDE OIL: Since it looks like the March 1 low at 60.18 in the APRIL Crude Oil has marked the END of either a “wave-2", OR “wave-b correction”, developments over the next few days could determine the correct, near-term count. In essence, once the Feb 26 high at 64.24 is at least “retested”; if not slightly exceeded, then it will probably be possible to label A COMPLETED, “3-wave rally” off the Feb 9 low. At which point, IF our Preferred Count is right, then we ought to hit A SIGNIFICANT, “wave-(b)PEAK”. In this case, the stage should then be set for A SIZEABLE, “wave-(c)DECLINE”; presumably resulting in move to our KEY SUPPORT AT THE 57.08-55.81 LEVEL? However, if that “juncture” does NOT quickly give-way to a bearish, “5-wave drop”, then we’ll have to figure that Feb 9 low has actually marked the END of a “wave-(4)correction”, of the same-degree as the August 1-August 31/”wave-(2)setback”. Under this count, we’ll still need to trace-out A FINAL, “wave-(5)ADVANCE”; presumably to our KEY RESISTANCE AREA...AT 67.82-68.20. Either way, however, since we should be WITHIN ONE ADVANCE of finishing a “Primary wave-rally” from the June 2017 low, AT LEAST A 5-TO-6-MONTH, “Primary wave-DECLINE”...should begin soon. 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.
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 117.75-117.45 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 116.10-115.00 BASIS MAY? Resistance is at 122.15 and 123.50-124.50(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 03/07/18
SOYBEANS: HRT are long MAY beans at 10.45(+$4,125 w/rlvr). Use a stop at 10.23.
WHEAT: HRT are long MAY wheat at 4.66(+$2,687 w/rlvr). Keep the stop at 4.77.
HOGS: HRT are long the APRIL hogs at 67.27(+$370). RAISE the stop to 67.37. ALSO, IF stopped-out, then re-enter long at 66.05, using a stop at 64.40.
SILVER: HRT can buy a MAY mini silver at 16.755, using a stop at 16.265.
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.