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Brent Harris Elliott Wave
Futures Market
Advisory Service
Daily Service Sample Article
(12/19/05)
ELLIOTT AG PAGE
SOYBEANS: While the extent of the recent
advance in soybeans COULD mean that a rally to the $7.00-$7.50 level will occur
(next spring?), the intermediate-term pattern strongly indicates that such an
advance is NOT underway, presently. In essence, because I can NOT make a case
for a completed decline from the June 2005 peak yet (7.57 ½), it is likely that
we’ll see AT LEAST one more decline to the 5.32-5.22 level, i.e., BEFORE the
probabilities of a much larger rally will increase significantly. Furthermore,
in the event the current rally holds BELOW the critical 6.02 3/4-6.05 level in
the Jan contract, which is my slightly preferred count, then an eventual decline
to AT LEAST the 5.00 ½-4.96 ½ level will also remain a distinct possibility. At
any rate, IF Jan beans drop BELOW support at 5.82-5.78 ½ BEFORE the 6.05 level
is exceeded, then traders should probably re-enter the short-side...quickly.
However, in the event a move ABOVE 6.05 occurs initially, then we’ll probably
look to sell near the key 6.25 3/4-6.32 resistance area.
CORN: In light of this weeks gap ABOVE the
key 1.95-1.99 1/4 continuation chart resistance in corn, it is likely that a
completed decline from the July top has been confirmed, i.e., basis the
continuation chart. In which case, at some point over the next couple of months,
a CYCLE-WAVE-IV advance should carry the nearby contract back to about the
2.29-2.32 level (?). However, because a completed decline from the July top will
NOT be indicated in March futures, UNLESS prices EITHER make a new rally high
AFTER Thurs Dec 15, OR critical resistance at 2.07 ½-2.10 3/4 is penetrated,
traders should NOT exit shorts, yet. This key resistance level yields the
9.1%-14.58%-30.9%-retracement combination from the 1996, 2004 and 2005 highs, as
well as a 14.58%-retracement in March futures (2.10 3/4). Anyhow, IF this area
holds initially, then we should see a drop to AT LEAST the 1.97 ½ level
near-term; if not 1.91 ½-1.88 3/4. Near-term support is at 2.04 3/4-2.02 1/4,
with near-term resistance (after 2.07 ½-2.10 3/4) at 2.14 1/4-2.15 1/4 and
2.19-2.21.
WHEAT: Since this weeks rally in the March
wheat peaked right at the upper-end of the key 3.22 3/4-3.26 1/4 long-term
resistance area, and only a moderate downside reversal has developed so far, a
rather critical wave-position remain at hand. Note, that this key area yields
the 19.1%-30.9%-30.9%-38.2%-retracement combination from the 1996, 2003, 2004
and 2005 highs, as well as the 30.9%-retracement projection from the Sept peak
basis March futures. Anyhow, IF my preferred count is correct, and this area
holds, then we should see a 9th-wave decline to AT LEAST the 2.88-2.84 level,
i.e., BEFORE a larger, primary wave-[2] bounce unfolds. However, IF the March
wheat EITHER trades ABOVE 3.28 intraday, OR a close over 3.26 1/4 occurs, then
we’ll have to conclude that wave-[2]-up has already started. In this event,
presumably within several weeks, we’ll be looking to re-enter short at EITHER
the 3.34 ½-
3.36 ½ resistance area, OR 3.44-to-3.47 max! Near-term support for March wheat
is at 3.16-3.15 3/4, 3.09 ½ and 3.03 1/4-2.99 ½.
COTTON: [No Change] 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: Although another test of the key
long-term support, at 59.20-59.00, can’t be ruled-out for the now nearby Feb
hogs, this weeks expiration of the Dec contract should have DIMINISHED the
probabilities. However, our MINIMUM, upside objective at 68.05-68.70 is now also
MUCH CLOSER, so the upside potential may NOT be worth the risk. Note, while it
is entirely possible that the Feb hogs will rally to the 70.85-71.25, or
73.65-73.77 resistance clusters BEFORE the long-term BEAR CYCLE resumes, it will
be possible to make a case for a completed rally...once Feb hogs exceed the Dec
2 peak (+68.30). Pivotal support for Feb hogs is now at 64.22-63.72.
ELLIOTT WAVE FUTURES MONITOR
STOCKS: [See Chart] Since the nearby
contract in the S&P 500 finally closed well-above the 1265.90-1269.80 resistance
level, we should have confirmed a rally to the next key resistance area, or
1295.30-1297.80. This area yields the 65.45%-retracement projection from the
2000 top, AND an appreciation of 69.1%-from the 2002 low. Anyhow, since a move
to this area in the March S&P will likely coincide with a rally to the key
85.4%-retracement level in the March Dow Jones contact, or 11085-to-11160, a
HIGH PROBABILITY/HIGH POTENTIAL selling opportunity could occur in the next
1-to-2-weeks. By the way, traders should also note, because the Dow Jones
Industrial Average has finally penetrated the March top, this is actually the
first time (this year) that I can make a case for a completed, DOUBLE-THREE,
i.e., from the 2002 low. Near-term support for the March S&P is now at
1269.50-1266.00, 1260.00 and 1255.00-
1252.50.
SILVER: Since this weeks day-session low
in the March silver (8.42) occurred right at the low-end of the key
14.58%-retracement projections from the 1993 and 2001 lows, or 8.50-8.425, a
major upturn may have already begun. However, because the “time” and “pattern”
analysis in BOTH gold AND silver indicates that we have probably only finished
the INITIAL, wave-(a) section down, the odds favor one more sharp drop, i.e.,
wave-(c)-of-[4]. Under this count, the most likely target for the next low will
be at the 19.1%-retracement projections from the 1993 and 2001 lows, AND a
depreciation of 11.795%-from the Dec 12 peak, or 8.265-8.165 basis the March
silver. By the way, pivotal support for Feb gold is at 499.30-496.80 and
486.40-483.90. Resistance for March silver is at 8.68 and 8.75-8.81.
COFFEE: Although the near-term pattern in
March coffee still suggests that one more drop to new sell-off lows could occur
(-93.50), there will be a significant change in the support numbers-AFTER Dec
goes off-the-board on Monday, Dec 19. Beginning Tuesday, Dec 20, the critical
support for March coffee will rise to the 95.30-94.25 level. Thus, IF another
drop to new lows is going to occur (-93.50), then prices will probably “crash”
to the next major support level, or 90.00-to-89.25, i.e., before a major upturn
actually begins. Anyhow, depending on how the intraday pattern develops over the
next couple of days, we’ll probably be looking to go long; at EITHER of the
aforementioned support levels. Resistance for March coffee is now at 98.00-
98.85, 100.50-101.20 and 103.75-104.65.
COCOA: While the long-range pattern in
cocoa continues to indicate that the current rally will present a excellent
selling opportunity, Monday’s penetration of the 1461-1487 resistance area
suggest that a considerably larger, wave-(c) section up is probably unfolding.
Thus, once it becomes possible to label a completed, 5-or-9-wave pattern off the
Nov bottom, we’ll attempt to re-enter the short-side. The next closest area of
key resistance is at 1513-1519. However, there is a distinct possibility that
prices will reach FAR BETTER RESISTANCE; at 1554-1582. This area yields the
23.6%-50%-retracement combination from the 2003 and 2005 highs, as well as a
38.2%-retracement of the Mar-Nov decline basis Mar futures. Near-term support
for Mar cocoa is now at 1457, 1446 and 1436-1427.
NEW TRADES AND OPEN POSITIONS 12/19/05
CORN: Traders/Hedgers (50%) keep the stop
on short March corn at 2.11 1/4 (+$6,512).
WHEAT: Traders/Hedgers (75%) use a stop on
short March wheat at 3.28 1/4 (+$2,150).
SILVER: High Risk Traders (HRT) can buy
March silver at 8.285, using a stop at 8.055.
STOCKS: Traders can sell the March e-mini
S&P at 1294.75,use stop at 1311.75.
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