SOYBEANS: Given that the decline from the March 2 high (10.82 1/2) in the MAY soybeans has now about EQUALED BOTH the “duration” and “size” of the “wave-(2)setback, AND we’ve also dropped to OUR BEST/MINIMUM TARGET AT 10.37-10.29 3/4 IN THE NEARBY CONTRACT, AND/OR ABOUT *10.47-10.39 3/4 BASIS MAY, it sure looks like we’re CLOSE to a “wave-(4)LOW”. Thus, for those traders who took partial profits near the top, this would presumably be the ideal time to put those longs back-on. Once a “wave-(5)advance” has begun, I’m betting that it will remain in force, UNTIL WE AT LEAST REACH OUR MINIMUM, LONG-TERM TARGET AT THE 11.20 1/2-11.38 LEVEL. In the event the “wave-(5)section up” FINISHES BEFORE the 11.20 area is hit, however, then this development will likely mean that the overall advance from the Jan low...IS going to produce A SIGNIFICANTLY LARGER, “(9)-wave extension”! Given this scenario, prices should EASILY REACH OUR NEXT GOOD RESISTANCE AREA AT 11.62-11.72, WITH A “BLOW-OFF” TO OUR MAX OBJECTIVE AT 12.35-12.45 ALSO QUITE POSSIBLE? Once we have CONFIRMED A COMPLETED, “[c]-wave rally” from the Jan 12 low, however, then we should have A FANTASTIC SELLING/HEDGING OPPORTUNITY! Since that “juncture” will presumably ALSO mark the END of a “CYCLE-WAVE B ADVANCE” from the 2015 low, the stage ought to be set for A “CYCLE-WAVE-C DECLINE”, of the same-degree as the entire 2012-TO-2015/”A-WAVE DROP”. As outlined in the Feb Quarterly Report, by the time a fully-pronounced, “-wave/C-wave decline” has been traced-out, prices will likely fall to at least the next support area that’s UNDER the 2015 low, OR ABOUT 7.91-TO-7.81.There’s also support for MAY at 10.38 and 10.29-10.25(max), with the resistance at 10.41 ½, 10.52 ½-10.57, 10.69 ½ and 10.78-10.84(key!).
CORN: Despite the larger, “wave-(6)” and “wave-(4)pullbacks” that have occurred over the past week or so in the wheat and soybeans, respectively, the corn market IS STILL-IN(?)it’s “wave-(3)advance”...from the Jan 12 low. Thus, UNTIL we see a moderate, 7-TO-9 TRADING DAY, “wave-(4)setback” (at some point?), and then A SIZEABLE, “wave-(5)RALLY”, the pattern here will REMAIN BULLISH. In fact, IF we happen to witness A STRONG CLOSE-ABOVE KEY RESISTANCE AT THE 3.80-3.86 LEVEL IN THE NEARBY CONTRACT, AND/OR ABOUT 3.87 1/2-TO-3.93 1/2 BASIS MAY, BEFORE we see a larger, “wave-(4)correction”, then prices could first advance to our next higher resistance area. Which, as you know, IS BETWEEN 3.94 1/2-AND-4.06 1/2 IN THE NEARBY CONTRACT, AND/OR ABOUT 4.02-4.14 BASIS MAY. Given this scenario, I imagine the eventual objective for the “wave-(5)section up” will be AT EITHER 4.16-4.18, OR 4.25-4.29 1/2 BASIS THE NEARBY CONTRACT? At any rate, once IT IS possible to label A COMPLETED, “(5)-wave/[c]-wave rally” off the Dec “continuation chart” low, then we probably WILL WANT TO GO SHORT AND/OR AT LEAST LIGHTLY HEDGE. However, if that “juncture” does NOT result in a bearish, “5-wave drop”, OR another move-up to new rally highs follows, then we could be looking at A SIGNIFICANTLY LARGER,“(9)-WAVE EXTENSION”! Support is at 3.92, 3.82 3/4-3.79 1/4(good), 3.73 ½-3.72 ½(max) and 3.68-3.67.
WHEAT: Again, since we’ve clearly CONFIRMED A COMPLETED, “(5)-wave advance” from the Dec 2017 low in the MAY wheat; at the March 2 high of 5.18 1/2, it’s certainly possible that we’ve also finished an initial, “[a]-wave”. In which case, IF we either witness a “5-wave decline” here, OR a new sell-off low occurs AFTER THURSDAY, MARCH 15, then we’ll have to figure that a “Primary wave-[b]correction/decline”...HAS indeed begun. In which case, this market should REMAIN in a sideways-to-lower pattern for at least a few more weeks, BEFORE the stage is set for A SUBSTANTIAL, “Primary wave-[c]ADVANCE”. That said, however, the mere fact(?) that the Dec-March rally has produced such A GOOD-LOOKING, “Impulse-Wave”, WITHOUT having taken-out last year’s 5.53 1/2 high...IS FLAT-OUT BULLISH! In fact, as long as the current pullback DOESN’T carry too much lower, it’s quite possible; if not probable that we’re actually in JUST a “wave-(6)correction”. In which case, since this interpretation indicates that the up-move from the Dec low IS going to produce A SUBSTANTIALLY LARGER, “(9)-wave extension”, we could be close to starting THE OFTEN POWERFUL, “wave-(7) section up”. Anyhow, in this event, by the time we finish waves “(7)-up”, “(8)-down” and then “(9)-up”, prices should EASILY REACH OUR BEST/MINIMUM TARGET AT THE 5.79 3/4-5.89 1/2 LEVEL. Support is at 4.90-4.87 and 4.78 1/2-4.76 1/2(max?), with resistance at 4.99 3/4-5.04 1/2(good/key), 5.15 and 5.21-5.26.
COTTON: Since the recent “penetration” of May 2017 “continuation chart” high at 87.18 in cotton has presumably CONFIRMED that the advance-off the October 2017 low (66.84) is a “Primary wave-[c]”, of the same-degree as the entire, March 2016-to-May 2017 rally (55.66-to-87.18), it looks like we’re going to see CONSIDERABLY HIGHER PRICES? Note, because this count indicates that we’re currently in JUST the “wave-(3)-of-[c]section”, we still need to trace-out A MULTI-WEEK, “wave-(4)setback” (at some point?), and then stage at least ONE MORE SIZEABLE RALLY, or “wave-(5)”. Anyhow, as it stands right now, my guess is that THE MINIMUM, UPSIDE TARGET IS BETWEEN 96.09-AND-98.01. This KEY AREA yields a “23.6%-retracement” from the 2011 high, the March 2014 peak, AND the “EQUAL WAVES [a]-and-[c]” projection. So, IF it’s possible to label a completed, “wave-[c]advance”...when this area is hit, we’ll look to RE-ENTER THE SHORT-SIDE AND/OR HEDGES. If not, however, then we’ll likely rally to our NEXT HIGHER AREA AT 102.35-103.66? Near-term resistance is at 84.47-85.13, 86.44-86.77 and 87.51-88.37(good),with support at 84.19, 82.57-82.37 and 81.51-80.50(key).
HOGS: While IT IS possible to label A COMPLETED, “Double-Three Decline” from the Feb 5 “continuation chart” high in the nearby APRIL hogs, the initial advance off that low HAS NOT resulted in a “bullish-five” (yet?). Thus, at least on the “continuation chart”, it now looks like we could be in A FINAL, “Diagonal Triangle/wave-c decline”...from the Feb 26 high. In which case, since this scenario indicates that the next drop should also be THE FINAL, “wave-5-of-c section down”, I still think aggressive traders can look to RE-ENTER LONG NEAR OUR NEXT BEST SUPPORT-ZONE...AT 65.95-TO-65.60. The “stop” on longs, however, probably needs to GO BELOW OUR MAX SUPPORT NUMBERS AT 64.95-64.82 AND/OR 63.97? Anyhow, assuming a BULLISH, “5-wave rally” DOES occur within the next week or so, then our Preferred Count will continue to indicate that we’re FINISHING an“(x)-wave decline” from the Feb peak. In which case, the stage should soon be set for A SIGNIFICANT,“(a)-wave ADVANCE”. Note, while it’s certainly possible that the brunt of the “(a)-wave rally” will occur AFTER APRIL hogs expire, our projection analysis continues to indicate that THE MINIMUM, UPSIDE TARGET WILL BE AT THE 75.90-76.30 LEVEL. Near-term support is at 67.25-66.70.
ELLIOTT WAVE FUTURES MONITOR
STOCKS: Although the development of a “5-wave drop” on the intra-day charts could turn the short-term pattern back to the NEGATIVE-SIDE in a heartbeat, Friday’s penetration of the 2761.75-2765.00 resistance in the JUNE Mini S&P has likely confirmed that we’re STILL-IN a larger, “wave-(b)advance”...from the Feb low. In which case, IF the up-move from the March 2 low is THE FINAL, “c-wave”, then we could HIT THE TOP AS SOON AS LATE MONDAY/EARLY TUESDAY (March 12-13). However, IF we’re actually in a “Double-Three Advance” from the Feb bottom, then we’ll still need to trace-out A LARGER, BUT FINAL, “a-b-c RALLY”...from the March 2 low. Under this count, based on the duration of the first, “a-b-c advance”, it looks like THE OPTIMUM TIME FOR THE FINAL TOP WILL BE ABOUT FRIDAY, MARCH 16. Anyhow, either way, while I still show GOOD RESISTANCE AT THE 2790.00-2796.00 AREA IN THE NEARBY CONTRACT, AND/OR ABOUT 2795.00-2801.00 BASIS JUNE, THE BEST/MINIMUM TARGET IS PROBABLY AT 2805.75-2811.75 NEARBY, AND/OR 2810.75-2816.75 BASIS JUNE. In addition of other calculations, this area would effectively yield an up-move from the March 2 low...that’s “61.8%-the length” of the Feb 6-Feb 27 advance. There’s also resistance for JUNE at 2779.50 and 2822.25-2832.25(max), with support at 2783.75, 2769.25, 2760.25-2754.00(good), 2725.50-2722.25(good), 2703.50-2698.50 and 2684.25.
SILVER: Given that we appear to have FINISHED a “Double-Three Decline” from the Jan 25 high in the MAY silver; at the March 1 low of 16.16, AND we also held key support at about 16.17-15.96 for the second-time, it’s quite possible that we’ve ALSO COMPLETED the “Contracting Triangle” formation from the 2016 top. In which case, since this count would now call for A POTENTIALLY POWERFUL, “THRUST-WAVE ADVANCE”, the “risk/reward” here certainly FAVORS AN ATTEMPT AT THE LONG-SIDE. As discussed previously, based on the proximity of the “Thrust-Wave Projection”, AND numerous other calculations, this scenario implies A BARE MINIMUM TARGET AT THE 22.08-22.78 LEVEL. At this point, however, because the initial advance-off the March 1 low HAS NOT produced a “bullish-five” (yet?), we have to figure that we could also be looking at a somewhat RARE, “Triple Three Decline”? Given this scenario, based on the 10-TO-12 TRADING DAY DURATION of the first and second, “(a)-(b)-(c)declines”, THE OPTIMUM TIME FOR THE NEXT LOW...WILL BE AROUND MARCH 19-20. In this event, however, I imagine we’ll HOLD NEAR THE LOW-END OF THE 16.17-15.96 SUPPORT AREA? Finally, while there’s also still A SLIGHT CHANCE that prices could drop to our max support at 14.56-14.20, recent developments HAVE GREATLY REDUCED THE “ODDS” on this count. Near-term support for MAY is at 16.63-16.42, with the resistance at 16.62-16.73, 16.88-17.16(good/key?), 17.40-17.59 and 17.89-18.01(good).
CRUDE OIL: Since I’m estimating that there’s ABOUT A 65%-CHANCE that the Jan “continuation chart” high at 66.66 in the Crude Oil has marked the END of a “Primary wave-ADVANCE”...from the June 2017 low, our main interest right now is on the SHORT-SIDE. Note, once we’ve finished a “wave-(b)rally” from the Feb 9 low, then the stage should be set for AT LEAST ONE MORE SUBSTANTIAL DECLINE, or “wave-(c)”. In which case, based on current projections, it looks like the BEST/MINIMUM, DOWNSIDE TARGET WILL BE AT THE 57.08-55.81 LEVEL. The main problem at present, however, is that the initial advance-off the Feb 9 low appears to have produced at least a moderately BULLISH, “5-wave” pattern? Consequently, since this development implies that the setback from the Feb 26 high is JUST a “b-wave correction”, the optimum time to go short has presumably NOT been reached (yet?). However, if this interpretation is correct, then we should be VERY CLOSE to the “wave-b low” now? Thus,, while aggressive traders could attempt a quick-play on the long-side, I’m more inclined to wait for THE FINAL, “wave-c ADVANCE” to finish ,i.e., BEFORE GOING SHORT. Resistance for APRIL is at 61.29, 62.05-62.40(good), 63.07-63.51(good) and 64.62, with support at 61.69-61.65, 60.80-60.60(good/key!) 59.52 and 59.11-58.43(good).
COFFEE: Considering that the long-term count in coffee continues to strongly indicate that the Jan 2016 AND/OR June 2017 lows at 111.05 and 113.00...HAVE MARKED THE LOWEST POINTS that are apt to be hit under the current, “Contracting Triangle” formation, the “risk/reward” here certainly seems to GREATLY FAVOR THE LONG-SIDE! Note, the nearby contract is now WITHIN ABOUT 6.00-TO-8.00-CENTS OF THESE MAX AREAS. Whereas, once we finally BREAK-OUT through the top of the “Triangle” formation, the upside potential could be UNLIMITED! That said, however, because the short-term pattern DOES suggest that we’re probably STILL-IN A SOMEWHAT LARGER, BUT FINAL, “wave-[c]DECLINE”...from the Aug/Sept 2017 highs, I’d like to see ONE MORE DROP to new sell-off lows (-116.50 nearby contract), BEFORE re-entering long. Note, as it stands right now, IF one more drop to new sell-off low DOES occur, BEFORE we see a bigger rally, then I’ll presumably be able to make A GOOD CASE FOR A COMPLETED, “Diagonal Triangle”. Anyhow, based on the lower boundary-line from the “Diagonal Triangle”, AND numerous other projections, it looks like THE BEST BUY-Z0NE IS AT 116.40-TO-116.10 NEARBY, AND/OR ABOUT 117.75-117.45 BASIS MAY. The MAX SUPPORT, however, SHOULD BE AT 114.75-113.65 NEARBY, AND/OR ABOUT 116.10-115.00 BASIS MAY. Resistance is at 120.80, 122.15, 123.50-124.50(good/key?), 126.20 and 127.55.
COCOA: While recent developments in the cocoa have probably NEGATED our scenario of “A MAJOR, BUT FINAL, wave--of-C DECLINE”, it is interesting to note...that the overall advance from the June 2017 low is still JUST a “(3)-wave pattern”. Thus, once the wave-(3)”, OR “wave-(c)section up” from the Dec 2017 low has ended, a rather “CRITICAL JUNCTURE” will be at hand. At that time, IF a sizeable, “5-wave decline” happens to follow, then we’d certainly have to reconsider our original count. However, if that “juncture” ONLY results in a “3-wave drop”, and/or another move-up to new rally highs follows, then we’ll STRONGLY CONFIRM A SUBSTANTIALLY LARGER UP-MOVE...LONGER-TERM. At any rate, since it looks like the “wave-(3)”, OR “wave-(c)advance” from the Dec low is producing a “9-wave extension”, we probably still need to see ABOUT A 4-TO-6-TRADING DAY, “wave-8 pullback” (at some point?), and then A FINAL, “wave-9 advance” ,i.e., BEFORE the “CRITICAL JUNCTURE” is at hand. Resistance is 2471-2489(good), 2541-2555 and 2610, with support at 2451-2434 and 2372-2343 (good).
NEW TRADES AND OPEN POSITIONS 03/12/18
SOYBEANS: HRT are long MAY beans at 10.45(+$2,350 w/rlvr). Use a stop at *10.22.
WHEAT: HRT are long MAY wheat at 4.66(+$1,800 w/rlvr). Keep the stop at 4.77.
HOGS: HRT can buy the APRIL hogs at 66.05, using a stop at 63.80.
SILVER: HRT are long a MAY mini silver at 16.755(-$130). Keep the stop at 16.265.
COFFEE: HRT can buy the MAY coffee at 117.85, using a stop at 112.85.
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.