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 9.11-9.08, 9.04, 8.97 ½-8.94 ½(good), 8.85-8.81(good/key) and 8.72 3/4-8.70(max?), with resistance at 9.20 1/4-9.32(good/key), 9.41 3/4-9.44(good) and 9.55 ½.
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 we “technically” still need to score another new rally high in the May wheat, AFTER the next multi-day drop ends, in order to NEGATE the possibility of a bearish, “3-wave rally” off the March 2 low, I suppose our BULLISH COUNT is not completely “out of the woods”...yet? However, when one considers that we appear to have STRONGLY CONFIRMED THE COMPLETION OF NOT ONE, BUT TWO, “Diagonal Triangle Declines” since the July 2012 top; at the March low of 4.35 1/4, AND a pretty BULLISH-LOOKING, “five-wave rally” has also followed, I’m estimating that there’s AN 85%-CHANCE that we have indeed FINISHED A BIG, “A-B-C DECLINE” from the 2008 high. In which case, while our eventual, upside objective ought to be WELL-ABOVE $9.00, our current goal is to try and catch the initial, “Primary wave-”, OR “wave-[a]section up”. To that end, IF the March 24 low at 4.58 ½ completed the “wave-(2)decline”, then prices should now be poised to enter the usually POWERFUL, “wave-(3)-of-Primary wave-ADVANCE”! In which case, I imagine the BARE MINIMUM TARGET will be at the 5.06-5.10 level. However, by the time waves “(4)-down” and “(5)-up” have been traced-out, there’s a very good chance that prices will REACH AT LEAST THE NEXT BIG RESISTANCE AREA AT 5.53 3/4-5.57 3/4. In the event it’s possible to label a completed advance of “Primary” degree...when this area is hit, however, then A RATHER “CRITICAL” JUNCTURE will be at hand. If a “five-down” follows, AND completed rallies can also be labeled in the corn AND beans, then A BIG SETBACK is likely. Although, the 2016 low at 4.35 1/4 SHOULD HOLD. In the event 5.57 3/4 IS EXCEEDED, however, then we ought to see a “blow-off” to either 6.30 3/4-6.40 AND/OR 7.50-7.58? Support is at 4.73-4.70, 4.63-4.59 (good/key) and 4.49-4.47 ½, with near-term resistance at 4.74 ½-4.76 and 4.87-4.91.
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: Again, since the Nov 2015-March 2016 rally in hogs has produced A VERY GOOD-LOOKING, “five-wave/impulse-pattern”...on BOTH the continuation chart, AND via the April/June contracts, the overall pattern remains QUITE BULLISH. From a near-term standpoint, however, because it’s also possible that the March 10 high at 72.87 has marked the END of an initial, “wave-(1)”, we could see A MODERATELY LARGER, “wave-(2)SETBACK”(now?). In which case, we’ll probably be looking to RE-ENTER LONG...IF APRIL DROPS TO OUR BEST/MAX SUPPORT AT THE 67.55-66.95 LEVEL. Traders should also note, however, because the April hogs go off-the-board in about 2-weeks (April 14), AND the soon-to-be nearby May and June contracts ARE TRADING ABOUT 8.50-TO-12.50-POINTS ABOVE “SPOT”, I’m NOT quite sure which month to trade ,i.e., IF April drops to key support at 67.55-66.95? Anyhow, one-way or another, my guess is that the MAY contract will probably reach at least OUR MINIMUM TARGET AT 83.15-83.80, AND/OR ABOUT 87.35-88.00 BASIS JUNE...BEFORE we might be able to make a case for A SIGNIFICANT TOP. Resistance for April is at 70.65-70.75, 71.17-71.57(key) and 72.67.
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 2034.25-2041.00 (good?), 2055.75-2066.50(good/best?) and 2075.50-2085.50(max?), with support at 2039.50-2038.00, 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: Although the pattern in silver has been VERY DIFFICULT to read over the past year or so, I still think there’s slightly better than A 50%-CHANCE that the Dec 2015 bottom at 13.635...HAS NOT marked the end of the initial decline from the 2011 high. Thus, considering that the March 18 high at 16.17 in the May silver DID occur within a few-cents of our HUGE RESISTANCE AREA AT 16.22-TO-16.39, AND the initial decline from that high has now also produced a potentially BEARISH, “five-wave” movement, I’m looking towards SELLING the next multi-day bounce. In essence, as long as the next rally does NOT yield a “five-wave” pattern, I think we have to figure that this market is going to try and “take-out” the Dec 2015 bottom (-13.635). In which case, we’d obviously have some decent, “downside potential” here. Traders should also note, however, because I do believe the GOLD has already bottomed, it’s also quite possible that the current drop in silver will ONLY produce A MODERATE, “a-b-c” pattern. In which case, we could be looking at A MAJOR CHANGE in our Preferred Count? Once we’ve confirmed a completed drop from the 2011 top, then we should see A SUBSTANTIAL,MULTI-YEAR RALLY! Resistance is at 15.20, 15.415-15.62(good/best) and 15.84-15.93, with support at 15.16-15.04(good) and 14.86-14.44(key).
CRUDE OIL: Although the Jan-March rally in Crude Oil was quite a bit LARGER than one would normally expect for just a “wave-(4)” correction, it has so far produced ONLY a corrective-looking, “three-wave” pattern. Consequently, since the initial decline from the March 18 high (42.49) has now also resulted in a potentially BEARISH, “five-wave drop”, we’re leaning towards SELLING the next multi-day bounce. If we have indeed started either a “wave-(5)”, OR “Primary wave-decline” here, then prices would presumably have to at least EXCEED the Feb low at 26.05. In which case, the optimum, downside target would likely be at EITHER THE 24.81-24.52, OR 21.98-21.50 SUPPORT LEVEL(s). On the other hand, however, if the drop from the March 18 high ends-up ONLY yielding a “3-wave” pattern (in another week or two?), OR the 42.49 high is EXCEEDED, then we’ll have to conclude that A HUGE, “A-B-C DECLINE” from the 2008 top...HAS ALREADY BOTTOMED. Which, would be QUITE BULLISH! Support is at 37.61-37.44 (good) and 35.51-34.76, with resistance at 38.51-38.78, 40.05-40.47 and 42.15.
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: Given that the March 18 high at 3149 in May cocoa occurred right at the “mid-point” of our KEY, 3130-3165 RESISTANCE, AND the initial decline from that high has now also produced a potentially BEARISH, “five-wave” movement, traders ought to consider RE-ENTERING SHORT...IF PRICES CAN REACH THE UPPER-END OF THE 2996-3026 RESISTANCE AREA. Note, while it’s possible that AFTER the next sharp drop ends, prices will need to stage a final, “wave-(c)rally”, I can also make a pretty good case that we’ve ALREADY FINISHED a “Primary wave-advance”. In which case, since this count implies that we’re about to enter the HEART OF A MAJOR, “Primary wave--of-CYCLE-WAVE-C DECLINE”...we could be looking at ONE HECK OF A DROP! Just the “equal waves” projection would be at 2458. KEY RESISTANCE IS AT 2996-3026 AND 3086-3097, with support at 2928-2903.
NEW TRADES AND OPEN POSITIONS 03/30/16
BEANS: HRT are long the May beans at 8.83 1/4(+$1,562 w/rlvr). Keep the stop at 8.76 3/4, AND also attempt to take profits at 9.26.
CORN: Traders are long May corn at 3.71 ½($+125 w/rlvr). Keep the stop at 3.48.
WHEAT: HRT are long May wheat at 4.49 3/4 (+$1,350). Keep the stop at 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.