SOYBEANS: [No change] Since it’s certainly possible that the May beans will 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 9.20 1/4-TO-9.32, my current “guess” is that there’s BETTER THAN A 50%-CHANCE 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 9.10-9.08, 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 9.13 ½, 9.20 1/4-9.32(good/key) and 9.41 3/4-9.44(good).
CORN: Again, since the overall pattern from the July 2015 high in corn (4.38 3/4) continues to yield higher-lows, and lower-highs, within an 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 3.66-3.65, 3.60-3.58(good/key?), 3.55 and 3.48 ½, with the resistance at 3.71-3.72, 3.77 1/2-3.80 1/4(good/key), 3.87 and 3.93.
WHEAT: [SEE New Trades] 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 guess 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 6.30 3/4-6.40 AND/OR 7.50-7.58? Support is at 4.70, 4.63-4.58(good/key) and 4.49-4.47 ½, with near-term resistance at 4.68, 4.74 ½-4.76, 4.81 and 4.87-4.91.
COTTON: Given that the “duration” of the setback from the March 17 high in May cotton (58.89) is now EQUAL to that of the March 1-to-March 10 decline, AND prices are also staging another TEST OF THE LOW-END OF OUR KEY SUPPORT-ZONE AT 58.35-TO-57.05, it continues to look like A HIGHLY-PIVOTAL POSITION is at hand! If prices can turn back-up in a “five-wave” pattern now, AND EXCEED the 58.89 high, then our Preferred Count will continue to indicate that the Jan 2015 low (57.05)_has marked the “Orthodox BOTTOM” of an initial, “CYCLE-WAVE-A”. In which case, since this count indicates that we’re currently in just the early stages of A MAJOR, “Primary wave-[c]ADVANCE”, we’d obviously want to get back-in on the LONG-SIDE [SEE New Trades]. However, if a move-over the 58.89 high DOES NOT OCCUR pretty darn quick, then we may have to conclude that the initial decline from the 2011 top...IS STILL IN PROGRESS. In which case, prices will likely fall to the 46.29-43.40 level...BEFORE we see a low?
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 is at 69.32-69.70,70.65-70.75, 71.17-71.57(key) and 72.67.
ELLIOTT WAVE FUTURES MONITOR
STOCKS: Since we now only need to see A MILD, 1-day pullback in the June Mini S&P, and then one more shot-up to new rally highs, in order to make A VERY GOOD CASE FOR A COMPLETED, “(a)-(b)-(c)RALLY” off the Jan low, AND we’re also still in the OPTIMUM TIME-FRAME FOR A SIGNIFICANT PEAK, I suspect we’ll TRY TO GO SHORT...WITHIN THE NEXT DAY OR SO?. In terms of the KEY RESISTANCE, however, traders should note that the “stop” will need to GO ABOVE OUR MAX RESISTANCE AT 2075.50-2085.50. In addition to numerous other projections, this area possesses the upper channel-line from Nov 2015 top, which is moving parallel to the line connecting the Aug 2015 and Jan 2016 lows; actually at 2083.50. Anyhow, assuming this “juncture” DOES produce a “five-wave decline”...that lasts for MORE THAN 6-TRADING DAYS, then our Preferred Count will continue to indicate that we still need to see AT LEAST ONE MORE MAJOR DROP ,i.e., BEFORE a long-term low is in place. In which case, I’m still betting that prices will FALL TO AT LEAST 1744.00-1726.50. In the event this “juncture” DOES NOT yield a “five-down”, however, OR the 2085.50 area is EXCEEDED by much, then we’ll probably be looking at a move to new highs (+2134.00)? Near-term resistance is at 2055.75-2066.50, with support at 2060.50, 2052.25-2049.25, 2039.50-2038.00 (good/key?), 2027.00-2026.50, 2015.25-2014.25(good) and 1996.75-1991.50.
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 128.45, 130.25-131.00, 132.15-132.95(good), 135.45-136.00 and 137.25-138.35(good), with support at 128.15, 126.05-125.75(good) and 123.30-121.50 (good/max?).
COCOA: Since 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”, it certainly looks like the current “bounce” SHOULD BE SOLD (SEE New Trades). 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 now entering 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 REMAINS AT 2996-3026 AND 3086-3097.
NEW TRADES AND OPEN POSITIONS 03/31/16
BEANS: HRT are long May beans at 8.83 1/4. ADJUST stop to 8.74 3/4, AND take profits at 9.26. CANCEL the 9.26 sell, however, IF May first drops-below 9.00.
CORN: Traders are long May corn at 3.71 ½($-175 w/rlvr). Keep the stop at 3.48.
WHEAT: HRT are long May wheat at 4.49 3/4 (+$712). ADJUST the stop to 4.51.
COTTON: HRT can buy May cotton at 58.92 on-a-stop (58.96 limit), using a protective-stop at 56.63. CANCEL this trade, however, if first DROPS-BELOW 56.50.
COCOA: HRT sold the May cocoa at 3019 (+$450). Keep the 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.