SOYBEANS: Given that we’ve now CONFIRMED A COMPLETED, “five-wave rally” off the March 2 low in the May beans; at this week’s 9.17 high, IT IS “technically” possible to also label A COMPLETED, “(a)-(b)-(c)rally” off the Nov bottom. Thus, IF we happen to end-up getting a “five-wave/impulse-pattern down” here, then I guess we’d have to conclude that a significant, “Primary wave-PEAK” COULD’VE BEEN HIT. In which case, as you know, the stage could now be set for A FINAL, “Primary wave-DECLINE”...TO THE 8.32-8.06 ½ LEVEL? However, when you consider that the 9.17 level DID NOT even come close to our minimum, long-term target at 9.57-9.87; not to mention our closest resistance area at 9.20 1/4-to-9.32, AND the initial decline already looks MORE LIKE A BULLISH-THREE (as opposed to a “bearish-five”), I’m still betting on the LONG-SIDE. In fact, IF, over the course of the next several days, the current pattern continues to display a bullish, “three-wave” movement, I’ll probably be looking ADD A LONG-POSITION. In essence, if my Preferred Count is right, and we’ve ONLY finished an INITIAL, “wave-1 section up”, then upon the completion of the current, “wave-2 setback”...the MOST BULLISH-PHASE ought to be at hand! At that point, the stage should be set for the usually POWERFUL, “wave-3-of-(c)ADVANCE”. Anyhow, under this count, by the time we finish waves “3-up”, “4-down” and then “5-up”, prices should EASILY REACH OUR MINIMUM TARGET AT 9.57-9.87. However, in the event a “9-wave extension” occurs here, then the OPTIMUM OBJECTIVE WILL BE BETWEEN 10.24-AND-10.46 3/4. Longer-term, however, assuming it’s possible to label a completed, “Primary wave-advance”...when prices reach EITHER of these resistance areas, then we’ll probably want to REVERSE-AND-GO SHORT. As you know, at that juncture, our Preferred Count will presumably still call for A FINAL, “Primary wave-DECLINE”...TO THE 8.32-8.06 ½ LEVEL. Once this phase is over, however, then we ought to HIT THE MOST IMPORTANT LOW SINCE AT LEAST 2008. 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, with resistance at 9.13 ½, 9.20 1/4-9.32(good/key) and 9.41.
CORN: Although I DON’T see how my intermediate-term, “Bullish Counts” could be right in the beans and wheat, BUT WRONG in the corn, Thursday’s SLIGHT PENETRATION of the Jan continuation chart low at 3.48 1/2...certainly appears to have placed the corn market in a rather “precarious” position? If we DO NOT witness a near immediate, “five-wave rally”, then I guess we’ll have to figure that the entire Oct 2014-to-March 2016 wave-progression...could’ve COMPLETED the “CYCLE-WAVE-B ADVANCE” ,i.e., at the March 2016 high of 3.74. In which case, since this scenario indicates that we’re now in a “CYCLE-WAVE-C DECLINE”, of the same-degree as the entire 2012-2014 drop, I guess prices could be headed for OUR LONG-TERM OBJECTIVE AT 2.92-2.88...NOW? However, because this would have to be THE WORST, “Contracting Triangle” in a “CYCLE-WAVE-B” position that I’ve EVER SEEN, AND this count obviously DOES NOT FIT-IN with our interpretations in the beans AND wheat, I still think the more likely scenario is that the decline from the July 2015 peak...is just a “Primary wave-[b]correction”. In which case, presumably within the next couple of days, we WILL indeed witness A BULLISH, “five-wave RALLY”. If so, then our Preferred Count will still indicate that we need to trace-out A SUBSTANTIAL, “Primary wave-[c]ADVANCE”, of the same-degree as the entire 2014-2015/”[a]-wave rally” ,i.e., BEFORE the stage will actually be set for A MAJOR, “CYCLE-WAVE-C DECLINE”. Anyhow, given this scenario, it still looks like the MINIMUM, UPSIDE TARGET WILL BE AT THE 4.39 3/4-4.44 LEVEL, with a move as high as the 5.15-5.19 ½ area also quite possible. Support is at 3.48 ½-3.45(good/key?), 3.40 ½ and 3.36-3.33(good), with resistance at 3.51 3/4, 3.56-3.58 ½(good) and 3.64 ½-3.65 3/4(good/key).
WHEAT: Since the last “shot-up” in the May wheat DID NOT get close enough to the mid-March high at 4.79 ½...to constitute a completed, “three-wave rally” off the March 2 bottom, the LEAST BULLISH COUNT here continues to indicate that we need to see a “wave-c advance”; presumably to ABOVE the 4.79 ½ high. At which point, I guess a “critical” wave-position could be at hand? At that time, IF we happen to witness a “five-wave drop”, AND the corn market has also “broken-out” to the downside of it’s 10-month/Contracting Triangle” formation, then we’d presumably have to at least EXIT OUR LONG WHEAT POSITIONS...just in case? With that said, however, considering that the long-term count indicates that we’ve STRONGLY CONFIRMED THE COMPLETION OF TWO, “Diagonal Triangle Declines”...from the July 2012, and July 2015 highs, I still think there’s ABOUT AN 85%-CHANCE THAT THE MARCH LOW AT 4.35 1/4...WILL NOT BE VIOLATED. In fact, as long as the aforementioned, “critical” wave-position IS NOT immediately followed by a “five-wave decline”, aggressive traders will probably want to consider ADDING ANOTHER LONG. At that point, the stage ought to be set for a potentially POWERFUL, “wave-(3)-of-[a]ADVANCE”! In which case, by the time waves “(3)-up”, “(4)-down” and then “(5)-up” have been traced-out, I still think our BARE MINIMUM TARGET WILL BE AT 5.53 3/4-5.57 3/4. However, due to the extended duration of BOTH “Diagonal Triangle” formations, we probably have to figure that there’s BETTER THAN A 50%-CHANCE that we’ll actually see a “(9)-wave rally/extension” (instead). In this event, prices should easily reach the next higher resistance area at 6.30 3/4-6.40, with the BEST OBJECTIVE AT 7.50-7.58? Support is at 4.70, 4.63-4.58(good/key), 4.49-4.47 ½ (max?) and 4.39-4.31 3/4, with the resistance at 4.74 ½-4.76, 4.81, 4.87-4.91 and 5.06-5.10(good/key).
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:[SEE New Trades]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 ,i.e., BEFORE we might have A SIGNIFICANT HIGH?
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: Given that the initial decline from the March 18 high (16.17) in May silver appears to have produced a potentially BEARISH, “five-wave” pattern, AND the “bounce” off Tuesday’s low also has a “corrective” looking, a-b-c formation (so far?), aggressive traders could attempt A LIGHT, SHORT-POSITION, using a stop ABOVE our two closest areas of good resistance at 15.415-15.62 (best) and 15.84-15.93(max?). As you know, if our SLIGHTLY Preferred Count proves correct here, the stage should now be set for a “wave-(5)decline”; presumably to AT LEAST THE 13.65-13.39 SUPPORT-ZONE. However, because the pattern over the past year or so has be VERY HARD TO READ, AND we also DON’T have a clear, “three” OR “five-wave rally” in place from the Dec 2015 low, I’m probably going to officially STAY ON THE SIDELINES here? Note, because the long-term pattern in the GOLD does indicate that we’ve ALREADY FINISHED an initial decline of at least “CYCLE-DEGREE”...from the 2011 top, the implication here is that the “downside potential” may NOT justify the risk on the short-side. Anyhow, in order to CONFIRM A COMPLETED decline from the 2011 top in silver, the current drop will have to end-up yielding ONLY a “three” (OR, EXCEED the 16.17 high). Support is at 15.28, 15.16-15.04(good) and 14.86-14.44(good/key).
CRUDE OIL: Although the initial decline off the March 18 high in May Crude Oil (42.49) DID produce a potentially BEARISH, “five-wave” pattern, the subsequent bounce MISSED our best resistance area/sell-zone at 40.05-40.47. Thus, since Thursday’s drop to new sell-off lows has now actually turned the pattern into a possible, “7-wave/Double-Three”, I think we’ll hold-off on doing anything for at least another day or two. Note, IF another drop to new sell-off lows DOES NOT quickly follow the next small bounce, then the short-term formation could end-up indicating that the current decline is a “Bullish-Three” (instead)? Anyhow, since we’ve EITHER already hit a long-term low, OR we still need to stage “a final, “wave-(5)decline” to at least the 24.81-24.52 AND/OR 21.98-21.50 SUPPORT LEVEL(s), we ought to have a pretty GOOD TRADING OPPORTUNITY ,i.e., once we CONFIRM which count is correct? 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: Given that the “magnitude” of the Jan-March rally in coffee certainly appears to be enough to have CONFIRMED A COMPLETED, “Diagonal Triangle/SC-WAVE-(C)DECLINE” from the 2014 top, the implication here is that we’ve ALSO FINISHED the longer-term “Bear Cycle” from at least the 1997 high; if not from the 1977 all-time-high. Which, would be AN EXTREMELY BULLISH, LONGER-TERM COUNT! Consequently, while we still need to GET PAST the March high at 136.40, in order to CONFIRM that a larger up-move has indeed started, the current setback DOES look a bit more like a “bullish-three” ,i.e., as opposed to a “bearish-five”. Thus, high risk traders should probably go ahead and TAKE A SHOT AT THE LONG-SIDE (SEE New Trades). Support for May is at 126.05-125.75, 124.10-123.30 (best) and 122.20-121.50(good/max), with the resistance is at 128.45, 130.25-131.00 (good/key), 132.15-132.95(good), 135.45-136.00 and 137.25-138.35(good).
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 04/01/16
BEANS: HRT are long May beans at 8.83 1/4 (+$1,300 w/rlvr). Keep the stop at 8.74 3/4, AND ALSO CANCEL the order to take profits at 9.26.
CORN: Traders were stopped-out of long May corn at 3.48 for an $1,125 loss.
WHEAT: HRT are long May wheat at 4.49 3/4 (+$1,187). Keep the stop at 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.
HOGS: HRT can buy April hogs (or June??) at 67.57, using a stop at 65.17.
STOCKS: HRT can sell a June Mini S&P at 2074.75, using a stop at 2091.00.
COFFEE: HRT can buy the May coffee at 124.25, using a stop at 120.00.
COCOA: HRT are short the May cocoa at 3019 (+$690). LOWER the stop to 3048.
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.