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 *9.05 ½-9.12 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 8.68 ½-8.63 ½ AND/OR 8.47-8.40 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 near-by 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 8.92 3/4-8.95 1/4 and 9.02 3/4,with support at 8.89, 8.80-8.79(good) and 8.69-8.64.
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 3.73 ½-3.75 ½, 3.78 and 3.81 3/4-3.83 3/4 (good/key), with n.t. support at 3.68, 3.63-3.61 3/4(good), 3.57 3/4 and 3.51.
WHEAT: Since we still HAVE NOT confirmed that the drop from the Jan high is producing a “bearish-five” (yet?), the development of a “5-wave RALLY” at any point here...would be cause for “concern”. With that said, however, given that the current drop HAS NOW SIGNIFICANTLY EXCEEDED BOTH the greatest “duration” AND “magnitude of ANY other rally since the Sept 2019 low, it sure looks like we have indeed CONFIRMED A COMPLETED, “Single”, OR “Triple-Three Advance” from the 2016 low. Consequently, since this interpretation indicates that we’re going to witness AT LEAST AN “[a]-[b]-[c]DECLINE”, of the same-degree as the entire, 2016-2020 rally. In which case, based on the “80.9%-69.1%-retracement combination” from the 1999 and 2016 lows, AND A LOT of “depreciations” from past highs, it continues to look like THE MINIMUM, DOWNSIDE TARGET...IS AT THE 4.35 ½-4.31 LEVEL. Once a “wave-DROP” ENDS, however, then we could see A DECENT, 1-MONTH PLUS, “Primary wave-[b]RALLY”. However, because we’ll still need to see AT LEAST ONE MORE MAJOR DECLINE”, OR “wave-[c]”...BEFORE a more significant low MIGHT be at hand, we’ll again be looking to SELL/HEDGE this market. Given this scenario, prices should end-up falling to AT LEAST THE 3.89-3.85 LEVEL? Resistance for MAY is at 5.20-5.22, 5.31, 5.41-5.42(good/key) and 5.53, with support at 5.18, 5.13, 5.06 ½-4.99 ½(good) and 4.92.
COTTON: Since the BIG DROP over the past week or so in the cotton obviously appears to have STRONGLY CONFIRMED our Preferred Count, it now looks like it’s really just a matter of determining the manner in which the current, “Primary wave-DECLINE”...is apt to unfold? To that end, because the last rally clearly OVERLAPPED the “wave-(1)low”, the best bet is that we’re going to see as “(9)-wave EXTENSION”. In which case, since this implies that we’re now just the “wave-(5)SECTION DOWN”, we presumably still need to trace-out waves “(6)-up” (at some point?), “(7)-down”, “(8)-up”, and “(9)-down”. So, as long as the next 1-WEEK PLUS RALLY does not result in a “bullish-five”, we will be looking to ADD TO OUR SHORT-POSITION. By the time the aforementioned “waves” have been traced-out, it certainly looks like prices WILL REACH OUR OPTIMUM TARGET...AT THE 47.10-45.91 LEVEL. This area yields the KEY,“61.8%-times wave-” projection, the “90.9%-retracement” calculation from the 2001 low, and numerous “depreciations”. Near-term support is at 61.60, 60.80-60.49, 59.63 and 58.22-57.22 (good), with resistance at 61.56-62.22, 63.37-63.89 and 65.03-65.70(key!).
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 61.22-61.02(good), 59.55 and 57.10-57.00.
ELLIOTT WAVE FUTURES MONITOR
STOCKS: Considering that the “crash” in the MARCH Mini S&P HAS “BLOWN-OUT” THE KEY, “14.58%-38.2%-retracement/support combination” from the 2009 and 2018 lows...AT THE 2999.25-2984.50 LEVEL, it certainly looks like we’ve CONFIRMED A COMPLETED ADVANCE FROM THE 2009 BOTTOM. In which case, since this implies that we’re now effectively “correcting” the entire, 2009-2020 advance, we should be looking at THE MOST BEARISH-POSITION SINCE THE 2007 HIGH! At this point, however, because the 11-year duration of said rally IS SUBSTANTIALLY SHORTER THAN THE 25-TO-26-YEAR DURATION FROM THE “SC-WAVE-[I]-AND-WAVE-[III]ADVANCES”, the most likely scenario here...is that we’re now in a “CYCLE-WAVE-II DECLINE”. In which case, while one would presume that it will take at least 6-MONTHS-TO-1-YEAR to complete a down-move of this size (?), the “pattern” indicates that we’re currently in JUST THE INITIAL, “wave-[a]SECTION DOWN”. Thus, we probably WON’T hit a major low, UNTIL a “wave-[b]ADVANCE” is followed by A FINAL, “[c]-wave DECLINE”. Anyhow, based on the proximity of the KEY, “38.2%-retracement” projection from the 2009 low, a “30.9%-depreciation” from the Feb top, AND an estimated drop that’s about HALF-THE-SIZE of the 2007-2009 decline, it looks like THE DOWNSIDE TARGET...IS BETWEEN 2409.75-AND-2347.50. Near-term support is at 2906.75-2902.25, 2876.00-2863.75, 2825.50-2814.50 (good), 2787.50 and 2752.75-2749.00(good), with resistance at 2905.75, 2927.00, 2948.00(good), 2969.25, 2990.00-2992.00(good), 3011.50, 3025.75-3032.50(good), 3054.00 and 3075.00.
SILVER: Since Friday’s “penetration” of KEY SUPPORT AT THE 17.21-16.97 LEVEL IN THE NEARBY MARCH SILVER, AND/OR ABOUT 17.285-17.045 BASIS MAY...HAS CONFIRM-ED that the up-move from the Dec 2019 low IS NOT an “Impulse-Wave”, it’s apparent that we’re STILL-IN a larger decline from the Sept 2019 high. In which case, since this effectively makes the current drop MORE THAN 2-MONTHS GREATER in terms of “time”...than it took to complete the Feb-May 2019 decline, it’s quite possible that we’ve actually FINISHED a “Double-Three Advance” from the 2015 low. In which case, since this count implies that we’ve STARTED A MAJOR, “SC-WAVE-(C)DECLINE”, of the same-degree as the HUGE, 2011-2015 DROP, we could obviously be looking at A REALLY BEARISH COUNT! At this point, however, because IT IS also possible to label A COMPETED/NEARLY COMPLETED, “(3)-wave DROP” from the Sept 2019 high, I guess we’ll wait-and-see what happens on the next rally; BEFORE officially changing our Preferred Count. In essence, IF the next multi-day advance produces a “bullish-five”, then there’s still a chance that we’ll need to trace-out A FINAL, “wave-RALLY”...TO THE 21.25-21.40 LEVEL. If not, however, then we’ll have to figure that this market IS HEADED FOR THE 12.35-11.76 LEVEL. Support is at 16.625-16.495, 16.24-16.05(good/key!) and 15.78, with resistance at 16.65, 16.93-17.20(key),17.445-17.625 and 17.92-18.05 (key).
CRUDE: Given that the drop in APRIL Crude Oil has now reached KEY SUPPORT AT THE 45.50-44.30 LEVEL, which yields BOTH the “61.8%-times wave-[a]”, AND the “61.8%-times wave-(1)” projections, the “61.8-retracement” calculation from the 2016 low, AND “depreciations” of 69.1%, 41.15% and 30.9% from the 2008, 2018 and 2020 highs, it’s certainly possible that we’re close to starting SIZEABLE BOUNCE? At this point, however, because I’m currently UNABLE to make a case for EITHER a completed “Single”, OR “Double-Three Decline” from the 2018 high, I’m inclined to STAY SHORT. In essence, because we still need to see A MILD-TO-MODERATE(?), 2-WEEK, “wave-(4)RALLY” (at some point?), AND THEN stage at least ONE MORE SIGNIFICANT DROP, OR “wave-(5)”, it looks like prices will probably end-up FALLING TO OUR MAX SUPPORT...BETWEEN 40.83-AND-39.36. In addition to A LOT of other numbers, this area also yields the KEY, “76.4%-times wave-[a]” projection”. From a longer-term standpoint, however, once we have indeed FINISHED a “(5)-wave/[c]-wave DECLINE” from the Jan 2020 high, then we ought to have A HECK OF GOOD BUYING OPPORTUNITY! At that point, the stage should be set for A MAJOR, “CYCLE-WAVE-C ADVANCE”! There’s also support at 43.62 and 42.99-42.69(good), with resistance at 45.09, 46.40-46.50(good), 47.13, 47.82 ,48.50, 49.09-49.29(good/maximum?), 50.56(good), 51.24 and 51.92.
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 2679, 2714, 2749 (good) and 2784, with support at 2672-2668(good), 2632, and 2592-2590(good).
NEW TRADES AND OPEN POSITIONS 03/02/2020
BEANS: HRT/HEDGERS are short the MAY beans at 8.83 ½ (+$2,600 w/rollover). Use a stop at 9.16 1/4.
WHEAT: HRT/HEDGERS are short the MAY wheat at 5.37 (+$2,050 w/rollover). LOWER the stop to 5.51 3/4.
COTTON: HRT/HEDGERS are short the MAY cotton at 67.00 (+$3,395 w/rollover). LOWER the stop to 66.88.
SILVER: HRT were stopped-out of a long MAY Mini Silver at about 17.30 for an after rollover loss of $1,500. Stand-aside for now.
CRUDE OIL: HRT are short an APRIL Mini Crude at 54.30(+$4,020). Use a stop at 50.00.
COFFEE: HRT are long MAY coffee at 106.65 (+$1,762). 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.