Brent Harris Elliott Wave
Futures Market Advisory Service

Daily Service Sample Article (12/12/05)

ELLIOTT AG PAGE

SOYBEANS: Since the Jan soybeans closed ABOVE interim resistance at 5.63-5.67 ½ Friday, it obviously looks like we are indeed going to see another test of far more significant resistance, at 5.75 ½-to-5.81. Note, that this key area incorporates the 14.58%-retracement projections from the June highs on BOTH the continuation chart and basis Jan futures, as well the 14.58%-retracement projection from the 2004 top. Anyhow, considering that I am still UNABLE to make a case for a significant low here, AND the Nov 28 low (5.44 1/4) also FAILED to occur at any of my long-term support numbers, I obviously think prices will HOLD the 5.75 ½-5.81 level. If so, presumably within the next several weeks, prices ought to decline to my next major support cluster, at 5.32-5.22. At which point, depending on how things develop-into the 5.32 level, I may be able to make a case for a far more significant bottom? 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: [No Change] 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 reevaluate 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: [See Chart] 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: Considering that the intermediate-term pattern in cotton remains BEARISH, AND recent lows in BOTH the Dec and March contracts also FAILED to reach their 46.25-45.69 and 50.20-49.82 support levels, respectively, it certainly looks like the current rally ought to be SOLD. However, because my best resistance cluster at 55.22-55.70 is a substantial distance ABOVE the closest resistance area, or 53.66-54.08, I guess we’ll wait another day or two BEFORE giving a sell recommendation. Note, IF we can get a completed, a-b-c, or DOUBLE-THREE within the next few days, then we’ll hopefully be able to determine which resistance area to sell.
 

HOGS: Again, provided the nearby Dec hogs do NOT fall back BELOW 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: Since the advance in silver has now reached what should be VERY POWERFUL RESISTANCE in the 8.98-9.175 range basis Dec, and about 9.075-9.27 in the March contract, it looks like the LARGEST PULLBACK since the end of Oct will begin in the next few days. Note, that this key area yields the 14.58%-retracement projection from the all-time-high, as well as appreciations of 161.8%, 123.6%, 38.2% and 23.6% from the 1993, 2001, Aug 2005 and Nov 2005 lows. So, while aggressive traders could attempt a fairly quick play on the short-side, my primary focus is geared towards buying a multi-week/wave-[4] pullback. In essence, because the pattern now indicates that the next “leg-up” (wave-[5]) will likely penetrate the key 8.98-9.175 resistance zone (nearby contract), our eventual upside potential is now at 10.51-10.75 level. Support for March silver is now at 8.93-8.90, 8.80-8.76, 8.69 and 8.63-8.59.
 

STOCKS: [No Change] 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.
 

OJ: Since the recent move to new rally highs in Jan OJ has been followed by yet another new high, the overall pattern continues to indicate that a HUGE, upward extension is probably unfolding. Note, because wave-[1] up was 39.45-
cents in length, and wave-[3] will likely be AT LEAST 61.8%-to-76.4%-the length of wave-[1], the nearby contract could easily rally to at least the 139.80/145.55 level(s), BEFORE we see another multi-week set back. Of course, it’s always VERY RISKY trading during the “freeze season”. So, I guess we’ll just have to wait and see IF any decent buying opportunities develop. Near-term resistance for Jan OJ is at 127.30-130.35 and 137.10-139.80, with the support now at 126.65-126.50, 124.10-123.85 and 120.00-119.60.
 

COCOA: Again, since last weeks 1484 high in the March cocoa occurred right at 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.
 

COFFEE: [See New Trades] Although there’s still a chance that the March coffee will test the critical, long-term support one more time, now at 94.00-
92.65, the current bounce has now exceeded the greatest duration of any rally since the Nov 9 peak. Consequently, I think the more likely scenario here is that prices have already completed an IRREGULAR FLAT decline from the Oct 21 peak, i.e., at Mondays 94.00 low. In which case, we should AT LEAST witness a re-test of the Nov peak (112.40); if not the start of a VERY POWERFUL, primary wave-[3] advance. Near-term support is at 95.70-95.20, 94.50-94.30 and 93.80-92.65, with the resistance at 97.20-97.25, 98.55-98.85 and 100.15.
 

NEW TRADES AND OPEN POSITIONS 12/12/05
 

SOYBEANS: Traders were stopped-out of short Jan beans at 5.68 ½ for a loss of $250. Let’s re-enter short at 5.76 1/4 (day OR night) using a stop at 5.82 1/4. HRT/Hedgers (33%) keep your stop at 5.82 1/4 (-$263).
 

CORN: Traders/Hedgers (50%) use a stop on short March corn at 2.14 1/4 (+$6,887).
 

WHEAT: Traders/Hedgers (50%) LOWER the stop on short March wheat to 3.27 1/4 (+$2,562).
 

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

COFFEE: Traders use a stop on long March coffee (-$225) at 94.65 and HRT LOWER your stop back down to 91.65, initially (+$281). Then, on a move ABOVE 97.60, raise ALL STOPS TO 95.15.