Brent Harris Elliott Wave
Futures Market Advisory Service

Daily Service Sample Article (12/8/05)

ELLIOTT AG PAGE   

SOYBEANS: Although there’s still a slight chance that the Jan soybeans will test the MAXIMUM RESISTANCE area one more time, or 5.75 ½-5.81, the intraday pattern does indicate that a “5-wave”, impulse-pattern-down has developed-off Mondays high (5.75 ½). Consequently, the more likely scenario is that intermediate-wave-(3), of primary-wave-[5] down is now underway. In which case, a fairly steady downtrend should remain in force until our next major support area is reached, or 5.32-5.22. Even then, however, after another 5-to-
6 day/wave-(4) bounce occurs, prices will still need to trace-out a (5)th-wave drop to new sell-off lows, i.e., BEFORE a more significant rally is likely. At any rate, if the Jan soybeans can bounce to the LOWER resistance area, at 5.63-5.67 ½, we’ll go ahead an re-enter short. Traders can use a protective-stop at EITHER 5.68 1/4, OR 5.82 1/4...your choice. Near-term support for Jan beans is at 5.59 ½-5.57 ½, 5.48-5.43 and 5.37-5.36 1/4.
 

CORN: Since the last rally in the March corn did NOT exceed the MAXIMUM, 4-to-5-day duration, AND prices also peaked right at our mid-range resistance area; at 2.07-2.09, it continues to look like a CYCLE-WAVE-III decline is still in progress from the July top. In which case, prices should now be headed for AT LEAST the 90.9%-retracement/support projection from the 1987-1996 Bull market, or 1.79 ½ Dec AND about 1.93 ½ in the March contract. Once the Dec corn goes off-the-board on Dec 14, however, then we’ll have to re-
evaluate the projections for the March contract. At this juncture, the recently exceeded support numbers at 1.91 ½-1.88 3/4 may become a factor basis the March contract. Resistance for March corn is now at 2.04-2.05, 2.07-2.09 and 2.11-2.13 1/4 max!
 

WHEAT: Given that the recent bounce in March wheat equaled the greatest duration of any bounce since the Sept peak, AND prices also stopped right at the 23.6%-retracement level (3.23), it continues to look like a PRIMARY, or CYCLE-WAVE-I decline is still in progress from the Sept high. In which case, prices should quickly drop to the 2.88-2.84 level basis Dec, or about 3.04-3.00 in the March contract. However, because the pattern indicates that we may ONLY be in wave-(7)-of-[1] currently, a rally from the 3.04-3.00 level will probably only amount to a fairly small, wave-(8). In this event, the intermediate-term target for wave-[1] down in the March contract will probably (also) be at the 2.88-2.84 level; if not 2.72 ½-2.65. Near-term resistance for March wheat is now at 3.18, 3.23-3.24, 3.27 1/4 and 3.31-3.33.
 

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: [No change] 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
 

SILVER: Given that silver prices closed ABOVE the equal-waves-[1]-and-[3] projection Wed, at 8.66-8.735 Dec and 8.765-8.835 March, it looks like the current wave-[3] section up will remain in force until the POWERFUL 8.98-9.175 long-term objective is reached (or, about 9.08-9.275 basis the Mar contract). If so, given that this area yields the 14.58%-retracement projection from the all-time-high, AND appreciations of 161.8%, 123.6%, 38.2% and 23.6% from the 1993, 2001, Aug 2005 and Nov 2005 lows, we’ll almost surely witness a MAJOR PULLBACK. However, because the implication of a wave-[4] pullback (from this area) is that the subsequent wave-[5] advance will EXCEED the critical resistance, we’ll obviously want to buy the next 1-to-2-week correction. A penetration of the 9.175 level (nearby contract) suggests that wave-[5]-up will reach AT LEAST the 10.51-10.75 level. Support for March silver is now at 8.79-8.77, 8.665-8.635, 8.565-8.525 and 8.47-8.42.
 

STOCKS: Although the near-term pattern in the Dec S&P suggests that one more “pop-up” to new highs could occur here (+1274.50), we will effectively remain BEARISH as long as prices do NOT close much ABOVE the key 1265.90-1269.80 resistance level. Note, IF a strong close ABOVE 1269.80 does occur, then my projection analysis will indicate a rally to the next major resistance cluster; at 1295.35-1297.80. This area yields a 65.45%-retracement from the 2000 top, AND an appreciation of 69.1%-from the 2002 low. Near-term support for the Dec S&P is at 1250.30-1246.20, 1237.50-1235.40 and 1229.30-1228.80.
 

COFFEE: Again, because the last drop in March coffee 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.
 

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.
 

NEW TRADES AND OPEN POSITIONS 12/08/05
 

SOYBEANS: Traders/Hedgers (33%) can sell Jan beans at 5.62 3/4. Traders use a stop at 5.68 1/4 and HRT/Hedgers use a stop at 5.82 1/4.
 

CORN: Traders/Hedgers (50%) use a stop on short March corn at 2.14 1/4 (+$7,162).
 

WHEAT: Traders/Hedgers (50%) use a stop on short Mar wheat at 3.41 1/4 (+$2,275).
 

COFFEE: Traders can buy March coffee at 93.95, placing ALL STOPS at 91.65. *Also, IF a trade-above 96.70 occurs first, then raise the buy-order to 96.55. In this case, place ALL STOPS at 94.25.
 

COCOA: HRT keep the stop on short March cocoa at 1485 (+$110).