Brent Harris Elliott Wave
Futures Market Advisory Service

Daily Service Sample Article (12/6/05)

ELLIOTT AG PAGE

SOYBEANS: Since last weeks “timing” buy-signal in the Jan soybeans has now been followed by a penetration of key resistance, at 5.63-5.67 ½, it is certainly possible that we have confirmed the completion of a [5]-wave decline from the June top. In which case, a [6]th-wave rally could remain in force for another week or so, with prices possibly advancing as high as the 5.94-5.99 ½ level. However, because the decline from the Nov 14 peak appears to be TOO SMALL, relative to waves-[1]-and-[3]-down, AND the 5.44 1/4 low did NOT occur at ANY major support projections, I think the odds slightly favor a SMALLER, wave-(2)-of-[5] bounce. Under this interpretation, the current rally should hold the key 14.58%-retracement/resistance projection from BOTH the 2004 AND 2005 highs, or 5.75 ½-to-5.81. Anyhow, since I also show very good moving average resistance in this same area, I think we’ll take a crack at re-selling here...using a VERY TIGHT STOP. Near-term support for Jan beans is now at 5.63 ½-5.57 ½.
 

CORN: [No Change] Although a “timing” buy-signal could be triggered in the corn, IF a new rally high occurs AFTER Tues Dec 6, the recent penetration key support continues to favor LOWER PRICES. 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: Since the current rally in the March wheat has now EQUALED the greatest duration of any bounce since the Sept peak, or 6-trading days, AND prices also achieved my first good resistance area at 3.24-3.27 1/4, a somewhat pivotal juncture is at hand. If prices can turn back down here, then the pattern will continue to indicate that a primary wave-[1] decline is still developing-off the Sept peak. In which case, an immediate drop to AT LEAST the 2.88-2.84 level should occur in the Dec contract, or about 3.04-3.00 basis March. On the other hand, however, IF a new rally high occurs AFTER Tues Dec 6, then we’ll have to conclude that primary wave-[1] has already bottomed. Under this count, a great selling opportunity should develop in the next couple of weeks (as wave-[2] peaks), presumably at EITHER the 3.31-3.32, OR 3.35-3.37 ½ resistance area (March contract).
 

COTTON: Given that everything continues to call for an eventual drop to the 42.45-41.55 level in cotton (nearby contract), we will continue to look for any opportunities to get short the market. However, given that the next support area is at about the 50.20-49.82 level in the March contract, we probably won’t see much of a bounce until then. This area yields the 76.4%-
61.8%-retracement combination from the 1986 and 2001 continuation chart lows, as well as the Aug bottom in March futures (49.80). Resistance for March cotton is now at 52.53, 53.23, 53.81 and 54.39.
 

HOGS: As long as the Dec hogs do NOT drop back BELOW interim support at 61.60-61.27, or about 65.20-to-64.22 basis the Feb contract, the near-term pattern will indicate that a larger, wave-(c) advance is developing here. In which case, the MINIMUM OBJECTIVE for the Feb contract will likely be at the 70.85-71.25 level, with an eventual target at 73.65-73.77 possible. Traders should be aware however, that until Feb hogs EITHER exceed resistance at 68.05-68.70, OR the Dec contract goes-off-the-board (Dec 14), the nearby contract could still spike-down to the long-term support at 59.65-59.00.
 

ELLIOTT WAVE FUTURES MONITOR
 

OJ: While last weeks move to new highs in OJ suggest that a MUCH LARGER ADVANCE may be developing-off the Aug bottom, Mondays downward reversal not only traced-out a 5-wave decline on the intraday chart, but my first big support area at 121.65-121.25 was also exceeded. Consequently, until we can confirm that the current pullback is indeed a bullish a-b-c, I’m going to stay on the sidelines. Pivotal support for Jan OJ is now at 119.75-119.15 and 117.80-117.15 max!, with the resistance at 124.50-124.90 and 127.30-130.35.
 

COFFEE: [See New Trades] Since the decline in March coffee has now reached the upper-end of the key 50%-76.4%-retracement/support combination from the 2001 and 2005 lows, AND a 34.55%-depreciation from the March 2005 top, or 95.25-to-
93.25, another very important juncture is at hand. In essence, because I can NOT label a completed advance from the Sept bottom; at the Nov top, prices should NOT violate this support level. Otherwise, a HIGHLY UNUSUAL, 100%-
retracement of the initial advance will be indicated. At any rate, since the intraday pattern suggests that prices still need to trace-out a small, wave-8 bounce, and then a FINAL, 9th-wave drop to new sell-off lows, we’ll probably have a buy recommendations for ALL TRADERS on Tuesday, i.e., assuming the 93.25 level has NOT been exceeded. Near-term resistance for March coffee is now at 97.25, 98.55-98.85 and 100.15.
 

COCOA: Given that the advance in March cocoa has now achieved the key 14.58%-
30.9%-retracement resistance combination from the 2003 and 2005 continuation chart highs, as well as a 23.6%-retracement from the contract high in March futures, or 1461-to-1487, the ideal area for a MAJOR DOWNTURN is at hand. However, because the intermediate-term pattern remains UNCLEAR, only HIGH RISK TRADERS ought to go short. Note, it is possible that prices will extend to the 19.1%-38.2%-30.9%-retracement combination from the aforementioned highs, or 1513-to-1519. Pivotal support is now at 1451, 1441 and 1431-1422.
 

SILVER: [See Chart] While the overall pattern in silver indicates that we should remain focused on buying a multi-week/wave-[4] pullback...whenever it occurs, a rather important juncture is now at hand-in terms of the FINAL PHASE of the Bull market. If a wave-[4] correction/decline can occur from around the EQUAL WAVES-[1]-and-[3] projection, or 8.66-8.735 Dec and about 8.765-8.835 March, then the FINAL, [5]th-wave peak will probably still occur at our longstanding objective of 8.98-9.175 (nearby contract). However, in the event the current, wave-[3] section up remains in force until the 8.98-9.175 level is reached, then a MUCH MORE BULLISH wave-position will be indicated. Under this count, after a multi-week/wave-[4] correction occurs, wave-[5] will likely EXTEND to at least the 10.51-10.75 level. Support for the March silver is now at 8.445-8.415, 8.335, 8.295-8.245 (*best ?) and 8.11-8.035 max!
 

NEW TRADES AND OPEN POSITIONS 12/06/05
 

SOYBEANS: Traders/Hedgers (33%) were stopped-out of short Jan beans at 5.68 3/4 for a profit of $1,050. Lets re-enter short at 5.76 ½ (day OR night session), using a stop at 5.82 1/4.
 

CORN: Traders rolled both short Dec corn (Hedgers-50%) at about 1.90 for an after rollover profit of $6,937.50, and are now short Mar from about 2.03 1/4. Use a stop at 2.15 1/4.
 

WHEAT: Traders/Hedgers (50%) rolled short Dec wheat at about 3.03 ½ for a profit of $2,012.50, and are now short Mar from about 3.18 ½. Use a stop at 3.41 1/4.
 

COFFEE: Traders can buy Mar coffee at 94.05, placing ALL STOPS at 91.65. *ALSO, if Mar coffee first trades ABOVE 97.00, then raise the buy-order to 95.55 and use a stop at 92.85. HRT use a stop at 91.65, either way.
 

COCOA: HRT lower the stop on short Mar cocoa to 1485.
 

STOCKS: Traders keep the stop on short Dec e-mini S&P at 1271.25.