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Brent Harris Elliott Wave
Futures Market
Advisory Service
Daily Service Sample Article
(12/29/05)
ELLIOTT AG PAGE
SOYBEANS: If the advance from the Nov
bottom in soybeans can peak-out fairly close to the key 6.25 3/4-6.32 resistance
area basis the nearby Jan contract, or about 6.37-6.43 1/4 in the March beans,
the intermediate-term pattern will continue to favor a decline to the 5.32-5.22
level. Note, that this resistance level yields the 23.6%-38.2%-retracement
combination from the 2004 and 2005 continuation chart highs, as well as numerous
daily Gann angles AND the 144-
and-180-day moving averages. From a longer-term stand point, however, because it
NO LONGER appears likely that the decline from the June top is a larger, wave-C,
a FINAL ADVANCE to the $7.00-$7.50 level will probably need to occur sometime
during the spring-summer 2006 period, i.e., BEFORE the longer-term Bear cycle
actually resumes. Near-term resistance is at 6.11-6.17 1/4 basis Jan, and about
6.22-6.28 in the March contract. Support for the Jan beans is at 5.97 ½-5.94 and
5.82-5.78 ½, with support for March at about 6.09-6.05 ½ and 5.93 ½-5.90.
CORN: Since the rally in March corn is now
close to the 11.79%-23.6%-44.1%-retracement/resistance combination from the
1996, 2004 and 2005 highs, or 2.19-to-2.21, we could see a significant pullback
begin in the next day or two. However, because it is likely that the current
advance is ONLY the INITIAL, (a)-wave section up, AND my best resistance cluster
is actually at 2.29-2.32, I’m inclined to stay on the sidelines...for now. This
important resistance cluster yields the 14.58%-30.9%-56%-retracement combination
from the same highs, as well as a 38.2%-retracement from the July top in March
futures. Support for the March corn is now at 2.12-2.11 ½, 2.09 ½-2.07 ½ and
2.04 3/4-2.02 1/4.
WHEAT: Given that the March wheat has now
reached VERY IMPORTANT resistance at the 3.47-3.53 level, the most critical
wave-position since late-Sept/early Oct is at hand. Since this area not only
yields the 23.6%-25%-retracement projections from the 1996 all-time-high, but
the actual price-level from the recently completed TRIANGLE formation, or 3.53,
we ought to see a SHARP DOWN-TURN in the next couple of days. Note, if my
long-term count is correct, and the current rally is only wave-[2], of a MUCH
LARGER, wave-C decline, then the next leg-down ought to project to at least the
2.72 ½-2.65 level. As discussed previously, however, because the Dec
continuation chart low (2.92 ½) FAILED to exceed the D-wave low at 2.82 ½, it is
theoretically possible that a FINAL RALLY back towards the 2003/2004 highs is
going to occur (4.24-4.34). Thus, IF the 3.53-3.54 ½ is violated, we’ll probably
look to buy the next setback. Support for March wheat is now at 3.34 ½-3.33 ½
and 3.30 3/4-3.28 1/4.
COTTON: Given that the drop from the Oct
peak in cotton not only traced-out a 5-wave/impulse-pattern, but key support at
46.25-45.69 was also clearly MISSED in the nearby contract (50.20-49.82 basis
March), I’m inclined to try and sell the current rally. However, because I can
now make a case for a completed, CONTRACTING TRIANGLE-B-WAVE decline from the
2003 top, I think we’ll stand-aside for the next week or two, and see what
happens. Resistance for March cotton is at 55.20-55.70, with support at 52.20
and 50.20-49.82.
HOGS: Again, because the last decline in
Feb hogs did hold our MAXIMUM, near-term support; at 64.22-63.72, it looks like
the next “leg-up” to new highs has started. Traders should keep in mind,
however, once a 5-or-9-wave rally is in place, AND our MINIMUM OBJECTIVE at
68.05-68.70 is reached, it will be possible to label a completed advance from
the Aug continuation chart low (59.00). At which point, a HIGHLY BEARISH
long-term/wave-position could be at hand. Finally, in the event a daily close
BELOW 63.72 occurs BEFORE the 68.05 level is achieved, then ALL BETS ARE OFF. In
this case, another test of long-term support at 59.20-59.00 could occur, now.
ELLIOTT WAVE FUTURES MONITOR
COFFEE: Since the advance in March coffee
has now just about reached the Nov continuation chart high, or 108.50, it is
THEORETICALLY possible that an (a)-(b)-(c) rally from the Sept bottom will end
within the next week or so. However, because this scenario would almost
certainly NEGATE my longer-term bullish count, I think the far more likely
interpretation is that we are just now entering the middle-phase of primary
wave-[3], of CYCLE-WAVE-C. In this case, the MOST BULLISH POSITION of the entire
advance from the 2001 low ought to lie directly ahead, as wave-3-of-(3)-of-[3]
unfolds. Anyhow, for now, we’ll stay long-provided my MAXIMUM SUPPORT at
100.70-99.65 holds. The closest support, however, is at 104.65-104.00 and
102.40-102.20. Near-term resistance is at 107.60-107.90, 109.05, 110.55-111.35
and 113.60-114.70.
COCOA: Although a close BELOW key support
at 1444-1421 could produce a MAJOR sell-signal in the Mar cocoa, the recent
penetration of the 1452-1474 resistance area (nearby contract) still suggests AT
LEAST one more “leg-up”. If so, given that I show VERY POWERFUL resistance
clusters at BOTH the 1502-1519 and 1551-1582 levels, we may be looking to
re-enter short...sometime in the next couple of weeks. By the way, IF the 1421
support area is exceeded first, then the next closest support level will be
1353-1341.
OJ: Although it is certainly possible that OJ prices will turn back-up here, my
current “time-frame” analysis suggests that a completed advance from the Aug
bottom has been confirmed. In which case, the MOST BEARISH position since 2003
is at hand, as a multi-month/CYCLE-WAVE-B decline could have begun. Under this
count, the MINIMUM, downside objective is at the 38.2%-retracement projection
AND a 23.6%-depreciation, or 102.55-to-99.95. At any rate, since B-waves can be
tricky, especially during the “freeze season”, I’m officially going to STAY-OUT
of the market. Resistance for the nearby contract is at 121.35, 124.35 and
127.30, with the support at 120.00-119.00, 116.70-116.20 and 113.35-111.75.
SILVER: Since we MISSED our 8.285 buy in
March silver by ½-cent last week, AND prices have already advanced back-up to
the powerful 8.98-9.175 long-term resistance area, I guess we’ll now have to
WAIT on this market for AT LEAST a day or two. In essence, because the current
“leg-up” could be EITHER wave-(1)-of-[5], OR ALL of wave-[5], we need to see
“where” the next multi-day pullback occurs from. If price can pullback BEFORE
the 9.17 continuation chart high is exceeded, then we’ll probably want to go
long AFTER 2-to-3-days. However, if 9.17 is exceeded BEFORE a multi-day
correction occurs, AND prices fail to close ABOVE 9.175, then a MAJOR TOP could
be at hand. Support for March silver is now at 8.705-8.64, 8.56-8.50 and
8.425-8.345.
STOCKS: 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.
NEW TRADES AND OPEN POSITIONS 12/29/05
SOYBEANS: Trades/Hedgers (33%) can sell
March soybeans at 6.38 3/4, using a stop at 6.56 1/4.
WHEAT: Traders/Hedgers (33%) sold March
wheat at 3.43 3/4 (-$88). Use a stop at 3.54 3/4.
COFFEE: Raise the stop on long March
coffee to 99.55 (+$2,569).
COCOA: Traders can sell March cocoa at
1549, using a stop at 1593.
SILVER: Stand-aside.
STOCKS: Traders can sell the Mar e-mini
S&P at 1294.75, using a stop at 1311.75.
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