Brent Harris Elliott Wave
Futures Market Advisory Service

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Wheat (Oct. 10, 2005)

Since the wave-progression from the 1999 low in wheat (2.22½) has now produced a series of back-to-back CONTRACTING TRIANGLE formations, AND prices also have just reached very important resistance at the 3.44-3.54 level, one heck of a CRITICAL JUNCTURE is now at hand. In essence, while long-range pattern favors a tremendous, SUPER-CYCLE-WAVE-(C) decline to BELOW the 1999 bottom (-2.22 ½), like the other grains, it is possible that the “orthodox” peak of the intervening wave-(B) section has NOT yet occurred. Consequently, the price-action over the next couples of weeks in wheat should be very critical in terms of forecasting direction for AT LEAST the next few months. If the December wheat can hold BELOW the 3.54 level, and/or a drop BELOW 3.35 occurs, then we will likely have confirmed the completion of a 5 3/4-year, SUPERCYCLE-WAVE-(B) advance. In which case, given that an already BEARISH wave-(C) section down ought to be intensified by the presence of TWO TRIANGLE FORMATIONS, an extremely powerful decline will be indicated. Note, AFTER the completion of a TRIANGLE formation, the resulting THRUST-WAVE movement is usually quite strong...as “price” seemingly attempts to compensate for the previous lengthy period of inactivity. Anyhow, since the smaller of the two triangles, and the most recent triangle, yields a downside projection very close to the 2.72-2.68 support zone depicted on the wheat chart, or 2.65½, this would probably be just our initial, downside objective. However, because the FINAL, wave-(C) decline should eventually exceed the 1999 low (-2.22 ½), the longer-term target will likely be in the 2.05-2.04 range. On the other side of the coin, however, in the event the nearby contract first exceeds the July 2005 continuation chart high, or 3.54, then we’ll have to conclude that the wave-(B) rally from the 1999 low is still in progress. Given this interpretation, before a HUGE, wave-(C) decline actually begins, we’ll probably see a FINAL, THRUST-WAVE-UP to at least the 3.84-3.90 level. The MAXIMUM UPSIDE TARGET, however, could be at the 4.03 1/4-4.04 3/4 area.
 

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