SOYBEANS: While Thursday’s “penetration” of the Feb 3 low at 8.68 3/4 in the nearby MARCH beans appears to have BOLSTERED the case for a BEARISH, “(5)-wave DECLINE”, I’m NOT CLEAR on the precise, short-term count (yet?). Thus, as long as our closest area of KEY RESISTANCE...NOW AT 8.96 ½-9.03 HOLDS IN THE NEARBY CONTRACT, AND/OR ABOUT 9.06 ½-9.13 BASIS MAY, WE’LL STAY SHORT AND/OR HEDGED. In simple terms, because I can already make a pretty good case for A COMPLETED,“Triple-Three ADVANCE” from the May 2019 low; at the Jan 2 “continuation chart” high of 9.49, the implication here is that we’re now in JUST THE INITIAL, “wave-SECTION DOWN”; within a much larger, “-wave/C-WAVE DECLINE”! In which case, assuming we’ve not yet finished the “wave-DROP”, my projection analysis indicates that we should now be HEADED FOR EITHER THE 8.59-8.54 ½; OR 8.38-8.31 ½ SUPPORT AREAS IN THE NEARBY CONTRACT. Which, currently EQUATES TO 8.69 ½-8.64 ½ AND/OR 8.48-8.41 ½ IN THE MAY BEANS. Anyhow, given this scenario, once we’ve finished the “wave-”, then we ought to see at least A DECENT, 1-MONTH PLUS, “wave-corrective-rally”. Once this “phase” is over, however, then the stage should be set for A MORE NEGATIVE, “wave-DECLINE”! Finally, in the event we first witness A CLOSE-ABOVE 9.03 in the nearby contract, then the we’ll have to figure that we still need to trace-out A FINAL, “[c]-wave ADVANCE”. In which case, prices could RE-TEST THE 9.44 ½-9.53 RESISTANCE AREA...BEFORE IT’S LIGHT’S OUT. Near-term resistance for MAY is at 8.93 3/4-8.96 1/4 and 9.03 3/4,with support at 8.90, 8.81-8.80(good) and 8.70-8.65.
CORN: Given that the nearby MARCH corn has now SIGNIFICANTLY EXCEEDED KEY SUPPORT AT THE 3.75 ½-3.72 LEVEL, AND/OR ABOUT 3.79 3/4-3.76 1/4 BASIS MAY, it certainly looks like we have indeed CONFIRMED A COMPLETED, “wave-(b)ADVANCE” from the Sept 2019 low ,i.e., at the Jan 23 highs of 3.94 and 3.98 3/4, respectively. In which case, since this count indicates that we’re now in at least a “wave-3-of-(c)SECTION DOWN”, the short-term pattern obviously looks PRETTY NEGATIVE. Given this scenario, by the time a larger, “5-or-9-wave DECLINE” has been traced-out from the Jan 23 high, my “projection” analysis continues to suggest that the nearby contract WILL REACH THE 3.54 3/4-3.45 ½ SUPPORT AREA. Which, currently EQUATES TO ABOUT THE 3.59-3.49 3/4 AREA IN THE MAY CORN. Once this area is reached, however, then A VERY “CRITICAL JUNCTURE” should be at hand. At that time, IF it’s possible to label A COMPLETED, “(a)-(b)-(c)DECLINE” from the June 2019 high, then I’ll be able to make a good case for A SUBSTANTIAL, BUT FINAL, “Primary wave-[c]ADVANCE”; presumably yielding a re-test of the 2019 high at 4.64 1/4 ,i.e., BEFORE A HIGHLY-BEARISH COUNT IS ACTUALLY AT HAND! However, IF it’s EITHER not possible to label a completed, “wave-[b]DROP”, OR THE 2019 LOW AT 3.35 ½ IS EXCEEDED, then we’ll NEGATE the scenario of “a final, wave-[c]advance”. Which, needless to say, would be VERY NEGATIVE! Resistance for MAY is at 3.74 3/4-3.76 3/4, 3.79 1/4 and 3.83-3.85 (good/key), with near-term support at 3.69 1/4, 3.64 1/4-3.63(good), 3.59 and 3.52.
WHEAT: Although we “technically” still need to see another drop to new sell-off lows in the MAY wheat; AFTER the next 3-day plus rally ends, in order to CONFIRM A BEARISH, “(5)-wave DECLINE” off the Jan high, recent “developments” continue to indicate that we should be SHORT AND/OR HEDGED here. In essence, because the decline from the Jan peak has now EXCEEDED BOTH the “size” and “duration” of the Oct-Nov decline, AND we’ve also OVERLAPPED the Oct high, it sure looks like we have FINISHED EITHER A “Single”, OR “Triple-Three Advance” from the 2016 low. In which case, since this count implies that we’re at least in down-move that’s of the same-degree as the entire, 2016-2020 advance, the LEAST BEARISH COUNT would now call for A SUBSTANTIAL, “[a]-[b]-[c]DECLINE”. Anyhow, whether we’re in an INITIAL, “Primary wave-”, OR “wave-[a]DROP” here, my “projection” analysis continues to indicate that we should be HEADED FOR AT LEAST THE 4.35 ½-4.31 LEVEL. Once this “phase” has ended, however, then we could see A DECENT, 1-MONTH PLUS RALLY, BEFORE the stage will be set for AT LEAST ONE MORE BIG DROP, OR “wave-[c]”. Finally, in the event KEY RESISTANCE AT 5.65 3/4-5.71 IS EXCEEDED FIRST, WHICH CURRENTLY EQUATES TO ABOUT 5.62 1/4-5.67 ½ IN MAY WHEAT, then we may still need to trace-out A FINAL, “wave-(5)ADVANCE”...TO AT LEAST THE 5.87-5.94 3/4 LEVEL? Near-term resistance for MAY is at 5.31, 5.41-5.42 and 5.53-5.54, with support at 5.26-5.19 ½(good) and 5.13 ½.
COTTON: Since this week’s drop to new sell-off lows in the cotton certainly appears to have CONFIRMED that the down-move from the Jan high...IS producing a “(5)-or-(9)-wave/Impulse-Pattern”, we’ve presumably ALSO CONFIRMED A COMPLETED, “Primary wave-ADVANCE”...from the August 2019 low. In which case, because this count implies that we’re now in a “Primary wave-DECLINE”, of the same-degree as the entire, 2018-2019 “wave-DROP”, we could be looking at A VERY NEGATIVE-POSITION! In essence, because “rd-waves” are usually at least “61.8%-the size” of their “wave-” counterpart, the implication here is that we could now be HEADED FOR THE 47.10-45.91 LEVEL. Which, also yields the KEY, “90.9%-retracement” calculation from the 2001 low. However, in the event prices happen to FIRST POST A STRONG CLOSE-ABOVE THE 68.15-68.79 RESISTANCE AREA IN THE NEARBY CONTRACT, AND/OR ABOUT 68.25-68.89 BASIS MAY, then traders may want to TAKE PROFITS ON SHORTS? Given this scenario, we could see ONE MORE TEST of the same key resistance area that produced the Jan high at 71.96; ACTUALLY NOW AT 71.15-TO-71.84 (both contracts?). Near-term resistance is at 63.89, 65.03-65.70(good) and 66.60,with support at 61.95-61.60(key), 60.80-60.59.
HOGS: As long as the nearby APRIL hogs now HOLD the same, KEY RESISTANCE AREA that effectively produced this week’s high; ACTUALLY NOW AT THE 66.10-66.52 LEVEL, then the BEST COUNT will continue to indicate that we’re STILL-IN a larger, “Double-Three Decline”...from the May 2019 high via the “continuation chart”. In which case, while the pattern in the APRIL contract is a bit different, BOTH suggest that prices are NOW HEADED FOR THE FEB 3 “CONTINUATION CHART” LOW...AT 54.67. Given this scenario, however, since prices would presumably end-up falling to the next lower area of good support, I’m guessing there’s a reasonable chance that prices will REACH THE 52.00-51.15 LEVEL? Overall, however, because the second, “[a]-[b]-[c]DECLINE” from the Jan high will EQUAL the duration of the May-August 2019 drop...AROUND LATE MARCH-TO-EARLY APRIL, that would have to be the IDEAL TIME FOR A SIGNIFICANT, “CYCLE-WAVE-A LOW”. On the other hand, however, IF it either becomes apparent that we’re NOT going to break the 54.67 low by early April, OR KEY RESISTANCE AT 66.10-66.52 IS EXCEEDED, then we’ll have to figure that we’ve ALREADY STARTED A SIGNIFICANT, “CYCLE-WAVE-B ADVANCE”. Near-term resistance is at 62.65-62.85 and 63.87-64.42, with near-term support at 62.67, 61.22-61.02(good), 59.55 and 57.10.
ELLIOTT WAVE FUTURES MONITOR
STOCKS: Considering that the drop from the Feb 20 high of 3397.50 in the MARCH Mini S&P has obviously “blown-out” the Jan 31 low at 3212.75, we’ve presumably CONFIRMED that we’re actually in A LARGER SETBACK, of the same-degree as the “wave-(2)DECLINE”...which occurred between May-and-Oct of last year. In which case, since this “correction” LASTED ANYWHERE BETWEEN 3-AND-5-MONTHS, it is possible that we could REMAIN in a “wave-(4)correction/decline” for A SIMILAR DURATION? However, because we HAVEN’T actually witnessed a sustained decline IN EXCESS OF 3-MONTHS...SINCE 2015, I would NOT be surprised if the final low was hit in just the next several weeks? Anyhow, based on current projections, it looks like THE KEY, LONG-TERM SUPPORT AREA HERE...IS BETWEEN 2999.25-AND-2984.50. This area yields the “14.58%-38.2%-retracement combination” from the 2009 and 2018 lows, AND a “depreciation” of 11.795% from the Feb 20 high. So, IF it’s possible to label A COMPLETED, “Single”, OR “Double-Three Decline”...when this area is hit, we’ll look to GO LIGHTLY LONG. Once a “wave-(4)DECLINE” ENDS, then the stage should be set for SUBSTANTIAL, “wave-(5)RALLY”! There’s also support at 3075.25-3063.50, 3044.25-3037.25, 2949.50-2937.50 and 2906.75, with the resistance at 3064.50-3075.00(good), 3088.50-3096.00, 3113.75-3117.25(good), 3126.50, 3146.75-3159.50(good) and 3172.50.
SILVER: Since we’ve now CONFIRMED A COMPLETED, “3-wave RALLY” off the Jan 29 low in the MAY silver; at the Feb 24 high of 19.005, AND the subsequent drop is clearly TOO BIG to be just a small-degree, “wave-4", we’ve presumably CONFIRMED that we’re still-in a “wave-(2)SETBACK”...from the Jan high. Thus, while it’s still possible that prices could DROP TO OUR MAX SUPPORT AT THE 17.21-16.97 LEVEL IN THE NEARBY CONTRACT, AND/OR ABOUT 17.285-17.055 BASIS MAY, I have no intention of risking a long-position that far. Note, assuming we’re now in A FINAL, “wave-c DECLINE”, of the same-degree as the Jan 8-Jan 29, “wave-a DROP”, I’m guessing that prices will HOLD FAIRLY CLOSE TO THE 17.845-17.67 SUPPORT-ZONE IN THE MARCH SILVER, AND/OR ABOUT 17.92-TO-17.745 BASIS MAY. Note, this area yields the KEY, “76.4%-times wave-a” projection, AND A LOT of other calculations from the “continuation chart”. Anyhow, IF this count is right, A STRONG, “wave-(3)ADVANCE”...should begin within the next couple of days. In which case, it still looks like the nearby contract will REACH AT LEAST THE 19.61-19.725 RESISTANCE AREA, BEFORE we might witness a 1-MONTH PLUS, “wave-(4)PULLBACK”. In the event a sharp, “5-wave RALLY” DOES NOT emerge in the next few days, however, then I’ll get REAL CONCERNED! Near-term resistance for MAY is at 17.925-18.055, 18.42-18.485, 18.91-18.985(good/key), and 19.325. There’s also support at 17.645-17.595 and 17.465-17.395(max?).
CRUDE: [SEE CHART] Again, since the Feb 20 high at 54.66 in the APRIL Crude Oil occurred right at the mid-point of our KEY, “23.6%-34.55%-30.9%-retracement/resistance combination” from the 2008, 2018 and 2020 highs; AT THE 54.29-54.90 LEVEL, AND a sharp, “5-wave DROP” has followed, it certainly looks like we have indeed FINISHED a “wave-(2)RALLY”. In which case, since this count implies that we’re now in a “wave-(3)DECLINE”, of the same-degree as the BIG, Jan-Feb, “wave-(1)SECTION DOWN”, we could obviously be looking at A VERY NEGATIVE COUNT! Note, because BOTH the “61.8%-times wave-[a]”, AND the “61.8%-times wave-(1)” projections...OCCUR BETWEEN 44.40-AND-44.30, there’s a reasonable chance that JUST the “wave-(3)-of-[c]DROP” will reach our longstanding, MINIMUM TARGET; ACTUALLY AT THE 45.50-44.30 LEVEL. In which case, since this count implies that we’ll still need to trace-out waves “(4)-up” (at some point?), and then “(5)-DOWN”, it’s possible that prices will end-up FALLING TO OUR MAX SUPPORT...AT THE 40.83-39.36 LEVEL? Longer-term, however, once we’ve FINISHED a “Single”, OR “Double-Three Decline” from the Oct 2018 high, then we ought to have GREAT BUYING OPPORTUNITY! At that point, the stage should be set for A MAJOR,“CYCLE-WAVE-C ADVANCE”. Near-term resistance is at 47.13, 47.82, 48.50, 49.19(good) and 50.56(good).The next support is at 43.62 and 42.99-42.69(key).
COFFEE: While the “outside markets” are certainly a cause for “concern” here, the pattern in the MAY coffee indicates that we’ve not only COMPLETED the drop from the Dec high, but we’ve ALSO traced-out a bullish, “5-wave RALLY” ,i.e., from the Feb 6 low. Thus, while we still DON’T KNOW whether or not we’ve actually finished a larger, “Primary wave-[b]DECLINE”, the LEAST BULLISH COUNT implies that a “wave-(b)RALLY” will carry prices UP TO AT LEAST THE 132.05-TO-133.30 AREA. This level yields the “30.9%-21.345%-85.4%-retracement combination” from the 1977, 2011 and 2019 highs, AND numerous “appreciations” from past lows. Under this count, however, once a “wave-(b)RALLY” ENDS, then we’ll need to trace-out A FINAL, “(c)-wave DECLINE”; probably back-down to at least the 104.00 area ,i.e., BEFORE the stage will be set for A MAJOR, “Primary wave-[c]ADVANCE”! In the event the up-move from the Feb 6 low happens to produce a larger, “(5)-wave” pattern, however, then we’ll have to figure that we have ALREADY FINISHED the “Primary wave-[b]decline”. Given this scenario, the KEY, “Equal Waves [a]-and-[c]” projection, AND numerous other calculations suggest that THE MINIMUM TARGET WILL BE BETWEEN 149.45-AND-154.55. Near-term resistance is at 111.10, 112.75-113.25(good), 114.20 and 115.30-116.10, with the support at 110.50-109.50, 107.90-107.25,105.80-104.30(key?) and 102.60.
COCOA: Although the current drop in the MAY cocoa HAS probably been large enough to be a “wave-(4)”, of the same-degree as the Nov-Dec, “wave-(2)DROP”, the “continuation chart” pattern suggests that we probably need to REMAIN in a downtrend for at least another week. Thus, for now, I’m going to stay-out of this market. However, IF I’m soon able to make a good case for a completed, “wave-(4)DECLINE”, AND it’s also possible to label A COMPLETED, “wave-(5)ADVANCE”...when the nearby contract REACHES OUR KEY RESISTANCE AT 3026-TO-3058, then we’ll be looking to GO SHORT. By the way, based on the current spread, it looks like THE EQUIVALENT RESISTANCE FOR MAY COCOA IS AT ABOUT 2956-2988. At any rate, since the larger advance from the 2017 low continues to look like a “BEARISH-THREE”, we’ll presumably have A VERY GOOD SELLING OPPORTUNITY...fairly soon? However, IF a strong close-above 3058 occurs in the nearby contract, then prices could “BLOW-OFF” to either of our two next higher resistance areas AT 3160-3165 AND/OR 3301-3304. Near-term resistance is at 2749, 2784, 2818-822(good) and 2853, with the support at 2747, 2723-2721(good) and 2672-2668.
NEW TRADES AND OPEN POSITIONS 02/28/2020
BEANS: HRT/HEDGERS are short the MAY beans at 8.83 ½ (+$2,400 w/rollover). Use a stop at 9.16 1/4.
WHEAT: HRT/HEDGERS are short the MAY wheat at 5.37 (+$1,800 w/rollover). Use a stop at 5.69 1/4.
COTTON: HRT/HEDGERS are short the MAY cotton at 67.00 (+$3,395 w/rollover). LOWER the stop to 69.12.
SILVER: HRT are long a MAY Mini Silver at 18.075 (-$288 w/rollover). Keep the stop at 17.35 for now.
CRUDE OIL: HRT are short an APRIL Mini Crude at 54.30(+$3,800). Use a stop at 50.725.
COFFEE: HRT are long MAY coffee at 106.65 (+$1,162). Keep the stop at 104.00.
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.