Brent Harris Elliott Wave
Futures Market Advisory Service

Daily Service Sample Article (12/1/05)

ELLIOTT AG PAGE

SOYBEANS: While a “timing’ buy-signal could be triggered, IF the Jan soybeans do NOT turn back down on Thurs (Dec 1), the pattern from the Nov 14 peak still indicates that a [5]th-wave decline has NOT bottomed, yet. However, IF the Jan beans can stage one more decline to new sell-off lows, preferably within the next several days, then it will be possible to label a (5)-wave/[5]th-wave pattern down. Consequently, IF prices happen to drop to my next major, long-term support area; at 5.32-5.22 (5.28 *best), we’ll look to take profits on our short position. This key support level incorporates the 80.9%-90.9%-retracement combination from the 1999 and 2005 lows, depreciations of 50%-and 30.9%-from the 2004 and 2005 highs, as well as a [5]th-wave decline that is 38.2%-the length of waves-[1]-thru-[3], i.e., minus the Nov 14/wave-[4] peak. Overall, however, because the longer-term pattern now strongly indicates that prices will AT LEAST drop to the 5.00 ½-4.96 level BEFORE a major rally is a reasonable bet, a play on the long-side MAY NOT be a worthwhile strategy, i.e., from the 5.32-5.22 level. Near-term support for the Jan beans is at 5.48-5.43 and 5.37-5.36 1/4, with the key resistance now at 5.63-5.67 ½ max?
 

CORN: Again, given that the nearby Dec corn did “break” key support at the 1.91 ½-1.88 3/4 level, it obviously looks like LOWER projections have been confirmed. Note, that the next lower area of good support is now at the 90.9%-retracement projection from the 1987-1996 Bull cycle, or 1.79 ½. However, because the long-range pattern continues to call for an eventual decline to AT LEAST BELOW the 2000 bottom (-1.74), a drop to the next lower support cluster at 1.71 ½-1.67 ½ is certainly possible. At any rate, as long as the MAXIMUM RESISTANCE at 1.97-1.99 1/4 holds in the Dec contract, or about 2.11 ½-2.13 3/4 basis Mar corn, we’ll hold short. The closest resistance, however, is now at 1.90-1.90 ½ and 1.92 3/4-1.95 1/4 Dec, and about 2.04 ½-2.05/2.07 1/4-2.09 3/4 in the March contract.
 

WHEAT: Although the Dec wheat did close back ABOVE the 3.03 1/4-2.99 ½ support level Wed (Nov 30), my projection analysis continues to favor a near-
term drop to AT LEAST the 2.88-2.84 level. However, because the far more significant long-term support numbers are actually at the 2.72 ½-2.65 level, the most likely scenario is that primary wave-[1], or CYCLE-WAVE-I will achieve this area, BEFORE a sharp bounce emerges. This support zone yields the 76.4%-retracement projection from the 1999 low, the THRUST-WAVE projection from the recently completed TRIANGLE formation, and depreciations of 38.2%, 27.25% and 23.6% from the last 3-significant highs. At any rate, in the event a larger, 1-week plus rally does occur BEFORE the 2.72 ½ level is reached, we’ll certainly be looking to add to our short-position. Resistance for the Dec wheat is now at 3.08 3/4-3.11 ½, 3.16-3.17 and 3.20 ½-3.23 1/4 max!, with the equivalent resistance for the Mar contract at 3.25 ½-3.28 1/4, 3.32 3/4-3.33 3/4 and 3.37 1/4-3.40 max!
 

COTTON: [See New Trades] Since the overall pattern in cotton continues to indicate that the nearby futures contract is headed for the 42.40-41.55 level, we’d obviously like to sell any decent rallies that may develop...BEFORE prices drop too much farther. To that end, IF the nearby Dec contract can “spike-up” to big resistance in the 51.90-52.45 range BEFORE the Dec 7 expiration, we’ll go ahead and sell the Mar futures. The equivalent resistance for Mar cotton is at about 54.75-to-55.75. Interim support for cotton is at 46.25-45.69 basis Dec, or about 50.20-49.82 in the Mar contract.
 

ELLIOTT WAVE FUTURES MONITOR
 

STOCKS: Since a completed, (9)-wave pattern-up can now be effectively labeled off the Oct low in BOTH the Dow Jones Industrials AND the Dec S&P, I can now make a pretty strong argument for the completion of a MUCH LARGER, CYCLE-WAVE-
B advance from the 2002 lows. In which case, given that a HUGE, CYCLE-WAVE-C decline could be underway, the MOST BEARISH position since 2000 could be at hand. So, as long as the Dec S&P does NOT trade back ABOVE the key 1265.90-
1269.80 resistance area (by much), we’ll stay short. This area yields the 61.8%-retracement projection from the 2000 top, AND a 65.45%-appreciation from the 2002 bottom. Pivotal support for the Dec S&P is now at 1250.40-1249.00, 1245.00-1241.90, 1236.30-1234.50 and 1228.50-1227.50.
 

SILVER: [No Change] While the primary wave-[3] advance from the Nov 1 low in Dec silver (7.41) could easily EXTEND to the equal-waves-[1]-and-[3] projection, or about 8.66, prices have now reached my MINIMUM (wave-[3]) OBJECTIVE; at 8.33-8.365. This area yields the 94.43%-retracement projection from the 2004 top, AND a wave-[3] that is 76.4%-as long as wave-[1]. Consequently, it is now unlikely that we will be able to catch a minor pullback, as the next correction in excess of 3-trading days will probably be the initial stages of a LARGER, primary wave-[4]. In other words, given that wave-[2] lasted for about 3-weeks, we probably won’t be looking to buy silver until we see AT LEAST a 2-to 3-week setback. Support for silver is now at 8.235-8.22, 8.105-8.05 and 8.005-7.97 basis Dec, or about 8.34-8.325, 8.21-8.155 and 8.105-8.075 in the March contract.
 

COFFEE: In light of Wed penetration of the key 99.20-98.30 support level in March coffee, we have obviously confirmed that a LARGER correction from the Nov top is still in progress. However, because the long-range pattern still looks BULLISH, AND I can NOT even make a case for a completed rally off the Sept bottom (yet), I suspect that a significant “upturn” will begin within the next several days. Consequently, once the March coffee completes a 5-wave/(c)-wave decline from last weeks 104.25 high, we’ll look to re-enter the long-side. The next area of key support for the March coffee is now at 95.25-to-93.25. This level yields the 50%-76.4%-retracement combination from the 2001 and 2005 lows, a 34.55%-depreciation from the 2005 top AND the 76.4%-times wave-(a) projection. By the way, the 1 X 1 daily GANN angle from the Sept low is now also at 95.10. Near-term resistance is at 98.55-98.90, 100.30 and 101.20-101.45.
 

COCOA: If the March cocoa can now stage one more “spike-up” to new rally highs (+1446), I will be able to make a case for a completed, a-b-c rally off the Nov 14 bottom. Thus, if prices can also achieve my best resistance cluster at 1461-to-1487, aggressive traders can LIGHTLY SELL. This area yields the 14.58%-30.9%-retracement combination from the 2003 and 2005 continuation chart highs, as well as a 23.6%-retracement from the contract high in March futures. The precise, short-to-intermediate-term pattern is far from certain, however, so ONLY High Risk Traders ought to sell...for now. Note, that prices could EXTEND to the next higher resistance cluster, at 1513-1519. Near-term support is at 1401-1389.
 

NEW TRADES AND OPEN POSITIONS 12/01/05
 

SOYBEANS: Traders/Hedgers(33%)use a stop on short Jan beans at 5.68 3/4 (+$1,587).
 

CORN: Traders/Hedgers (50%) lower the stop on short Dec corn to 2.00 1/4 (+$7,187).
 

WHEAT: Traders/Hedgers (50%) keep the stop on short Dec wheat at 3.24 1/4 (+$1,987).
 

COTTON: Traders/Hedgers(33%)can sell March cotton at 54.74, using a stop at 56.21.
 

STOCKS: Lower the stop on your short Dec e-mini S&P to 1271.25 (+$500).
 

COFFEE: High Risk Traders (HRT) were stopped-out of long March coffee at 98.20 for a loss of $431. HRT can re-enter long at 95.15, using a stop at 91.85.
 

COCOA: HRT can sell the March cocoa at 1461, using a stop at 1526.