SOYBEANS: Although we could still see significantly higher prices in the beans right-away, IF OUR KEY RESISTANCE AT 10.68-10.74 NEARBY, AND/OR ABOUT 10.78 1/2-10.84 1/2 BASIS MAY...IS EXCEEDED in the next day or two, it looks like we’ve ALREADY FINISHED a “wave-(3)advance” from the Feb 6 low. In which case, based on the duration of the “wave-(2)decline”, which could’ve LASTED ANYWHERE BETWEEN 4 1/2-TO-8 TRADING DAYS, the current “wave-(4)drop” could BOTTOM ANYTIME BETWEEN THURSDAY MARCH 8-AND-TUESDAY MARCH 13. Anyhow, when viewing the current support projections...in conjunction with the size of the “wave-(2)setback”, it looks like THE OPTIMUM SUPPORT/BUY-ZONE IS AT ABOUT THE 10.37-10.29 3/4 LEVEL IN THE NEARBY CONTRACT, AND/OR ABOUT 10.47 1/2-10.40 1/4 BASIS MAY. By the way, for those traders who may have taken partial profits near the high, this would seem to be the IDEAL AREA TO PUT THOSE POSITIONS BACK-ON. Anyhow, under this count, upon the completion of a “wave-(4)decline”, the stage should be set for AT LEAST ONE MORE SIZEABLE ADVANCE, OR “wave-(5)”. Once a “wave-(5)rally” has also ENDED, however, then we could be looking at ONE HECK OF A “CRITICAL JUNCTURE”! At that point, IF we’ve at least reached our MINIMUM TARGET AT 11.20 1/2-11.38 (nearby contract), then we’ll have to strongly consider TAKING PROFITS ON LONGS AND GOING SHORT/HEDGING. However, IF we’ve either NOT REACHED the 11.20 level, at that time, OR another move-up to new rally highs follows JUST a moderate, several-day setback, then the pattern will likely call for A SIGNIFICANTLY LARGER,“(9)-wave extension” ,i.e., BEFORE it’s lights-out. Near-term support for MAY is at 10.68 1/2-10.66 1/2(good) and 10.59, with resistance at 10.70, 10.78 1/2-10.84 1/2(good!) and 10.96 ½-11.02.
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-TO-3.94 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 *3.80-3.78 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 for MAY corn is at 3.83 1/4, 3.80-3.78(best), 3.74-3.73 1/4(good/max), 3.68 1/4-3.67(good).
WHEAT: Given that I can now make a case for A COMPLETED, “(5)-wave rally” off the Dec 2017 low in the MAY wheat; at the March 2 high of 5.18 1/2, there’s A VERY SLIGHT CHANCE that we’ve also finished an initial, “[a]-wave”. In which case, IF we now happen to witness A DECLINE IN EXCESS OF 10-TRADING DAYS, then we could actually REMAIN in 1-month plus, “Primary wave-[b]decline”, BEFORE the larger uptrend resumes? That said, however, the FAR MORE LIKELY SCENARIO here is that we’ve ONLY FINISHED EITHER a “wave-1-of-(5)section up”, OR a “wave-(5)advance”...from the Feb 22 low. Given this first count, which will be confirmed IF the 5.18 1/2 high is TAKEN-OUT in the next day or two, then we’ll still need to trace-out waves “3-up”, “4-down” and then “5-up”, BEFORE we’ll actually complete the “wave-(5)advance” from the Feb 22 low. If a new rally high IS NOT hit in the next day or two, however, then we’ll have to figure that we’ve already started A MODERATELY LARGER, “wave-(6)setback”. Given this count, we should REMAIN in a sideways-to-lower pattern into about EARLY NEXT WEEK, WITH THE KEY SUPPORT AREAS AT 4.88-4.84 AND 4.73 ½-4.72 ½ NEARBY, AND/OR ABOUT 4.93-4.88 AND/OR 4.79 1/2-4.77 1/2 BASIS MAY. Upon the completion of a “wave-(6)drop”, however, this count could be REALLY BULLISH...as we may still need to trace-out waves “(7)-up”, “(8)-down” and then “(9)-up”. Anyhow, either way, THE BEST/MINIMUM TARGET REMAINS AT 5.79 3/4-5.89 ½. Near-term resistance for MAY is at 5.02-5.07(good/pivotal?), 5.17 1/2 and 5.23-5.28 1/2(good).
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: Although it certainly looked like we had confirmed a completed, “a-b-c DECLINE” from the Feb 5 “continuation chart” high in the nearby APRIL hogs, the last bounce DID NOT produce a “bullish-five”. Thus, since we’ve also dropped to new sell-off lows, THE BEST COUNT now indicates that we’re probably witnessing a “Double-Three Decline” from the Feb 5 high...instead. In which case, based on the “duration” of the first, “a-b-c section down”, it now looks like THE OPTIMUM TIME FOR A SIGNIFICANT LOW...IS BETWEEN NOW-AND-EARLY FRIDAY MARCH 9. That is the point at which the second, “a-b-c decline” from the Feb 26 high will EQUAL the duration of the first. Anyhow, as long as a drop to new sell-off lows DOES NOT OCCUR AFTER FRIDAY, then the best count here will indicate that we’ve hit A SIGNIFICANT, “(x)-wave LOW”. In which case, the stage should be set for A SUBSTANTIAL, “(a)-wave RALLY”; presumably yielding a move back-up to AT LEAST THE 75.90-76.30 LEVEL. IF a drop to new sell-off lows DOES occur after Friday, however, then all-bests-are-off (near-term). Support for APRIL is at 67.25-66.70, 65.95-65.60(good/best?), 64.95-64.82 (good/max?) and 63.97.
ELLIOTT WAVE FUTURES MONITOR
STOCKS: Since it looks like there’s SLIGHTLY BETTER than a 50%-chance that the Feb 27 high at 2795.00 in the JUNE Mini S&P has marked the END of a “(b)-wave rally” from the Feb 6 or Feb 9 low, aggressive traders could go LIGHTLY SHORT near Tuesday’s 2739.00, using a stop-above GOOD RESISTANCE AT 2761.75-2765.00. If a “wave-(c)decline”, of the same-degree as the March-Feb, “(a)-wave drop” has indeed begun, then it will likely REMAIN IN FORCE...UNTIL WE AT LEAST REACH OUR MINIMUM, DOWNSIDE TARGET AT THE 2467.50-2456.00 LEVEL. The BEST, longer-term objective, however, may well be BETWEEN 2394.00-AND-2356.25? Conversely, however, in the event the current setback FAILS to produce a larger, “5-wave decline”, within the next week or so (?), then we’ll have to figure that the Feb 27 high has ONLY finished an initial, “wave-a”, OR “a-b-c section up”. In this event, we ought to have A REALLY GOOD SELLING OPPORTUNITY, AFTER a final, “wave-c”, OR “a-b-c advance” has been traced-out. Given this scenario, we should at least RE-TEST OUR MINIMUM TARGET AT THE 2790.00-2796.00 AREA IN THE NEARBY CONTRACT. Near-term resistance for JUNE is at 2696.50, 2716.50-2719.00(good), 2729.00, 2737.25 and 2749.25, with support at 2725.50-2722.25, 2703.50-2698.50, 2684.25-2673.75, 2654.00-2649.00, 2629.50-2622.50 (good), 2604.25, 2591.75, 2564.00-2536.00(good/key!), 2504.25 and 2591.75.
SILVER: Although we HAVE NOT actually confirmed a bullish, “5-wave rally” off the March 1 low at 16.16 in the MAY silver (yet?), the recent up-move appears large enough to have CONFIRMED A COMPLETED, “[e]-wave decline”...from the Jan 25 peak? Thus, since this count implies that we could now be in the initial stages of a potentially POWERFUL, “THRUST-WAVE ADVANCE”, the “risk/reward” factor alone suggests that we should take A SHOT AT THE LONG-SIDE. Note, IF we have indeed started a “CYCLE-WAVE C ADVANCE”, of the same-degree as the 2015-2016, “CYCLE-WAVE A RALLY”, then the related calculations therein, coupled with the “Thrust-Wave” projection...CALL FOR A MINIMUM,UPSIDE TARGET AT 22.08-TO-22.78. That said, however, because we’ve clearly been in a “Triangle” for quite some time now, AND “Triangles” usually produce A LOT of “3-wave” movements in BOTH directions, it’s certainly possibly that we’ve NOT YET reached the optimum time to re-enter long? In essence, IF we DON’T get a “5-up” here, then we’ll have to figure that we still need to AT LEAST RE-TEST KEY SUPPORT AT ABOUT THE 16.17-15.96 LEVEL. And, of course, if the drop from the Jan 25 high is a larger, but final, “Primary wave-[c]”, then we could also still see a move to OUR MAX SUPPORT-ZONE AT 14.56-14.20? Near-term support is at 16.63-16.42, with resistance at 16.62-16.73, 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 61.69, 60.80-60.60(good/key!) 59.52 and 59.11-58.43(good).
COFFEE: [SEE New Trades] 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 count is right, then, at some point in the next few weeks, we’ll need to trace-out A FINAL, “wave-(5)-of-[c]DECLINE”. To that end, since this 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: [No change] Given that the up-move from the June 2017 “continuation chart” low in cocoa 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 03/08/18
SOYBEANS: HRT are long MAY beans at 10.45(+$3,650 w/rlvr). Use a stop at 10.23.
WHEAT: HRT are long MAY wheat at 4.66(+$2,200 w/rlvr). Keep the stop at 4.77.
HOGS: HRT were stopped-out of long APRIL hogs at 67.37 for a $40 profit. HRT can now attempt to re-enter long APRIL hogs at 66.05, using a stop at 63.80.
SILVER: HRT bought a MAY mini silver at 16.755(-$280). Use a stop at 16.265.
COFFEE: HRT can buy the MAY coffee at 117.85, using a stop at 112.85.
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.