Brent Harris Elliott Wave Futures Market Advisory Service (02/25/2020)


SOYBEANS: Given that the Jan 6-Jan 15 rally on the “continuation chart” LASTED FOR 8 ½-TRADING DAYS in the beans, whereas, the most recent Feb 3-to-Feb 21 advance TOOK ABOUT 13 ½-TRADING DAYS to complete, I really CAN’T TELL if the overall decline from the Jan 2 high is producing a highly-bearish, “(5)-wave” pattern? However, IF the nearby MARCH beans “blow-out” the Feb 3 low at 8.68 3/4, preferably within the next couple days, then I think we WILL be able to make a fairly good case for a “bearish-five”. In any event, as it stands right now, as long as the nearby contract HOLDS KEY RESISTANCE AT THE 8.98 ½-9.03 LEVEL, OR ABOUT 9.06 3/4-TO-9.11 1/4 BASIS MAY, traders and producers should probably STAY SHORT AND/OR HEDGED. In essence, IF we are indeed in the initial, “Primary wave-[1]-of-C SECTION DOWN” here, then the nearby contract should DROP TO AT LEAST THE 8.59-8.54 ½ AREA; IF NOT TO 8.38-8.31 ½...BEFORE the stage might be set for a larger, “wave-[2]corrective-rally”. Given this scenario, however, once a “wave-[2]advance” ENDS, then the stage should be set for an even MORE NEGATIVE, “wave-[3]DECLINE”. Of course, on the other hand, IF the nearby contract FIRST EXCEEDS THE 8.98 ½-9.03 RESISTANCE AREA, then we’ll have to figure that we still need to trace-out A FINAL, “[c]-wave RALLY”. In which case, prices will presumably stage ONE MORE TEST OF OUR 9.44 ½-9.53 OBJECTIVE...BE-FORE A REALLY BEARISH-POSITION is actually at hand! Near-term resistance for MAY is at 8.91 3/4-8.94 1/4, 9.01 3/4 and 9.06 3/4-9.11 1/4(good/critical!), with near-term support at 8.88, 8.79-8.78(good) and 8.68-8.63(good).

CORN: Although BOTH the wheat and beans came extremely close to triggering at least moderate “buy-signals” last week, Monday’s BIG DROP obviously prevented that from happening. By the same token, however, because the nearby MARCH corn has now also SLIGHTLY EXCEEDED KEY SUPPORT...AT THE 3.75 ½-3.72 LEVEL, we may have CONFIRMED that the Jan 23 high at 3.94 HAS INDEED MARKED THE END of a “wave-(b)ADVANCE”...from the Sept 2019 low ,i.e., via the “continuation chart”. In which case, since this count implies that we’re now in a “wave-3-of-c DECLINE”, we could be looking at A FAIRLY NEGATIVE COUNT. Given this scenario, by the time we’ve traced-out a larger, “5-or-9-wave DROP” from the Jan 23 high, my “projection” analysis continues to indicate that the nearby contract WILL REACH THE 3.54 3/4-3.45 ½ SUPPORT AREA. At which point, IF it’s possible to label A COMPLETED, “(a)-(b)-(c)DECLINE” from the June 2019 high, then we should be looking at A RATHER BULLISH-POSITION. If it’s EITHER NOT possible to label a completed drop, however, OR the 2019 low at 3.35 ½ IS VIOLATED, then we will confirm that we’ve ALREADY FINISHED the “CYCLE-WAVE-B ADVANCE” from the 2016 low. Which, would be QUITE BEARISH! Finally, in the event the corn happens to produce a near immediate, “5-wave RALLY” INSTEAD, then there’s still a chance that we’ll need to stage A FINAL, “wave-c ADVANCE”...TO THE 4.03 3/4-4.07 ½ LEVEL. Near-term resistance is at 3.75, 3.79-3.80 3/4(good) 3.86 and 3.92 ½, with support at 3.72, 3.65 and 3.60-3.59. ADD 3 3/4-CENTS FOR MAY.

WHEAT: Although the initial decline from the Jan high in the wheat DID NOT produce an obviously bearish, “(5)-wave” pattern, we DID get a large enough drop to CONFIRM A COMPLE-TED, “WAVE-C ADVANCE”...from the Sept low. Thus, considering that the last rally DID HOLD OUR CRITICAL RESISTANCE...AT THE 5.65 3/4-5.71 LEVEL, AND prices have now “BLOWN-OUT” the Feb 12 lows, I’m obviously very glad that we WEREN’T STOPPED OF OUR SHORT-POSITION. In essence, while there’s still A SLIGHT CHANCE that we need to trace-out A FINAL, “wave-(5)ADVANCE”; back-up to at least the 5.87-5.94 3/4 objective, this week’s drop to new sell-off lows certainly appears to have SIGNIFICANTLY INCREASED THE “ODDS” OF AN ALREADY COMPLETED, “SC-WAVE-[c]”, or “SC-WAVE-[X]ADVANCE” from the 2016 low. In which case, since this count implies that we’re still-in JUST AN INITIAL, “wave-[1]”, OR “wave-[a]DECLINE”, we could obviously be looking at A VERY NEGATIVE COUNT! As discussed before, based on the current formation, coupled with A LOT of different projections, I think we’re looking at A MINIMUM, DOWNSIDE TARGET...AT THE 4.35 ½-4.31 LEVEL. Once a “wave-[1]/[a]DROP” has ENDED, however, then we could see A SIZEABLE, “wave-[2]/[b]ADVANCE”...BEFORE the stage is then set for A MORE NEGATIVE, “wave-[3]/[c]DECLINE”! Near-term resistance is at 5.44 ½-5.45 ½(good) and 5.56 ½-5.57 ½, with near-term support at 5.35 ½, 5.29 ½-5.23(good), 5.16 ½ and 5.10-5.03(good). SUBTRACT 1 ½-CENTS FOR MAY.

COTTON: While the up-move from the Feb 3 low (66.75) in the nearby MARCH cotton DID last a couple days longer than I would’ve preferred, prices NEVER DID get much past our closest area of KEY RESISTANCE...AT THE 68.15-68.79 LEVEL. Thus, considering that Monday’s drop in BOTH the MARCH and MAY contracts has SIGNIFICANTLY EXCEEDED the Feb 3 lows, I can now make a pretty strong case for a “(5)-wave DECLINE” off the Jan high (especially on the continuation chart). Thus, since this development appears to have CONFIRMED that we have indeed FINISHED a “Primary wave-[2]corrective-rally”...from the August 2019 low, we could now be entering THE HEART OF A MAJOR, “Primary wave-[3]DECLINE”! Under this count, while it’s possible that we’re still-in just the INITIAL, “wave-(1)-of-[3]SECTION DOWN”, my guess is...that we’re actually in a “wave-(5)DECLINE” here, within a larger, “(9)-wave EXTENSION”. In which case, be the time we’ve completed waves “(5)-down”, “(6)-up”, “(7)-down”, “(8)-up”, and then “(9)-down”, prices should at least reach our MINIMUM TARGET...AT THE 51.76-51.02 LEVEL. However, I still think the OPTIMUM OBJECTIVE FOR JUST THE “wave-[3]DROP”...IS AT THE 47.10-45.91 LEVEL. Resistance is at 66.60 and 68.15-68.79 (good/key), with support at 66.00, 65.05 and 63.93. ADD .10-CENTS FOR MAY.

HOGS: Although my KEY RESISTANCE for the APRIL hogs remains at the “30.9%-38.2%-retracement combination” from the 2014 and 2019 highs, OR 69.05-69.90, AFTER the recent drop, I’m not so sure I’d want to see prices advance to this area now? Thus, as far as producers are concerned, it now looks like THE BEST AREAS GO SHORT ARE AT 66.10-66.52 AND 67.35-67.92. In any event, as long as these areas HOLD here, my Preferred Count will indicate that we’re STILL-IN a larger, “Double-Three Decline”...from the May 2019 high. In which case, since this interpretation implies that we still need to trace-out A FINAL, “wave-[c] DECLINE”, of the same-degree as the Jan 2-to-Feb 3 drop, we could see A SUBSTANTIAL DECLINE over the next month or more. Given this scenario, by the time we get to LATE MARCH/EARLY APRIL...the APRIL hogs should at least TRADE-BELOW the Feb 3 “continuation chart” LOW AT 54.67 (which, was the low from the now expired FEB contract). Note, that’s the point at which the down-move from the Jan 2 high will be ABOUT EQUAL to the “duration” of the May-August 2019 drop. In the event the aforementioned resistance areas are EXCEEDED FIRST, however, OR it becomes apparent that we’re NOT in a “wave-[c]DECLINE”, then we’ll have to figure that we’ve ALREADY STARTED A SEVERAL-MONTH, “CYCLE-WAVE-B ADVANCE”. Support is at 64.55-64.45, 62.87-62.67(good), 61.22-61.02(good) and 59.55.


STOCKS: Although it’s unfortunate that the MARCH Mini S&P DID NOT make it up to our longstanding, minimum the 3456.25-3475.00 level first, as I would’ve been able to make a good case for a significant top, the drop over the past couple of days obviously appears to have already accomplished that task. In essence, since we’ve now CLEARLY CONFIRMED A COMPLETED, “wave-(3)”, OR “wave-(7)ADVANCE” from the Oct 2019 low, we should now be in a decline that’s AT LEAST of the same-degree as the Sept-Oct 2019 drop. In which case, we ought to REMAIN in a “downward correction” for AT LEAST 3-WEEKS OR SO, WITH THE MINIMUM TARGET AT ABOUT THE GENERAL AREA OF THE JAN 31 LOW...AT 3212.75. On other hand, however, because is it’s also quite possible that we’re in a “wave-(4)DECLINE”, of the same-degree as the entire, “sideways pattern” that occurred between MAY-AND-OCT-OBER 2019, we could also see A CONSIDERABLY LARGER DROP...IN TERMS OF BOTH “PRICE” AND “TIME”. Given this scenario, it could take A COUPLE OF MONTHS (or more?), with prices FALLING AS LOW AS THE 3044.00-TO-2997.00 LEVEL ,i.e., BEFORE the stage is set for A MAJOR BUT FINAL, “wave-(5) ADVANCE”. Resistance is at 3172.50-3180.50, 3199.00-3201.75, 3218.00-3220.00, 3235.00, 3251.50 and 3268.00-3270.00, with near-term support at 3194.50, 3180.00, 3165.50, 3150.75-3148.75(good), 3121.50, 3092.50-3090.50(good) and 3068.75.

SILVER: Since we’ve now CONFIRMED A COMPLETED, “3-wave RALLY” off the Jan 29 low in the MAY silver; at Monday’s 19.005 high, it’s possible that we still need to trace-out A FINAL, “wave-c DECLINE”, of the same-degree as the Jan 18-Jan 29 drop. In which case, based on the “76.4%-times wave-a” projection, AND A LOT of other calculations on the “continuation chart”, prices could RE-TEST KEY SUPPORT AT ABOUT THE 17.845-17.67 LEVEL IN THE NEARBY CONTRACT, AND/OR ABOUT 17.925-TO-17.75 BASIS MAY ,i.e., BEFORE we actually resume the longer-term uptrend. At this point, however, because I can already make a pretty good case for A COMPLETED, “wave-(2)SETBACK” from the Jan high, AND Monday’s rally ALSO SLIGHTLY EXCEEDED THAT PEAK, my guess is that we’re ONLY IN A SMALLER, “wave-4 pullback”, of the same-degree as the Feb 3-Feb 12 drop. In which case, while we could REMAIN in a “corrective” pattern for another week or more, the stage should soon be set for A SIZEABLE, “wave-5-of-(3)ADVANCE”. Anyhow, given this scenario, by the time a larger, “wave-(3)SECTION UP” from the Jan 29 low has been traced-out, it still looks like THE MINIMUM TARGET...WILL BE AT THE 19.61-19.725 LEVEL. The longer-term objective, however, REMAINS AT THE 21.25-21.40 AREA. Near-term resistance for MAY is at 18.425-18.49, 18.915-18.99 (good/key) and 19.325, with near-term support at 18.395-18.32 and 18.20-18.10.

CRUDE: [SEE CHART] Considering that the Feb 20 high at 54.66 in the APRIL Crude Oil occurred right at the mid-point of our KEY, “23.6%-34.55%-30.9%-retracement/resistance combination” from the 2008, 2018 and 2020 highs; AT THE 54.29-54.90 LEVEL, AND a sharp, “5-wave DROP” has followed, it certainly looks like we have indeed FINISHED a “wave-(2)RALLY”. In which case, since this count implies that we’re now in a “wave-(3)DECLINE”, of the same-degree as the BIG, Jan-Feb, “wave-(1)SECTION DOWN”, we could obviously be looking at A VERY NEGATIVE COUNT! Note, because BOTH the “61.8%-times wave-[a]”, AND the “61.8%-times wave-(1)” projections...OCCUR BETWEEN 44.40-AND-44.30, there’s a reasonable chance that JUST the “wave-(3)-of-[c]DROP” will reach our longstanding, MINIMUM TARGET; ACTUALLY AT THE 45.50-44.30 LEVEL. In which case, since this count implies that we’ll still need to trace-out waves “(4)-up” (at some point?), and then “(5)-DOWN”, it’s possible that prices will end-up FALLING TO OUR MAX SUPPORT...AT THE 40.83-39.36 LEVEL? Longer-term, however, once we’ve FINISHED a “Single”, OR “Double-Three Decline” from the Oct 2018 high, then we ought to have GREAT BUYING OPPORTUNITY! At that point, the stage should be set for A MAJOR, “CYCLE-WAVE-C ADVANCE”. N.t. resistance is at 51.92(good), 52.61 and 53.29, with support at 50.88-50.15(good/key), 49.54 and 48.19-47.52(good).

COFFEE: While the “pressure” from A LOT of the outside markets here could prove to be TOO MUCH for the coffee, the “pattern” continues to indicate the up-move from the Feb 6 low should produce AT LEAST a “(b)-wave”, of the same-degree as the Dec-Feb drop; IF NOT A FAR MORE BULLISH, “Primary wave-[c]”. At this point, however, IF we’re going get a rally that is “tradeable” here, then the MAY coffee will somehow need to quickly stage a “wave-3", OR “wave-c ADVANCE”...TO ABOVE THE FEB 18 HIGH AT 113.80? If so, my “projection” analysis will presumably continue to call for A RALLY TO AT LEAST THE 132.05-133.30 LEVEL. Note, this area yields the “30.9%-21.345%-85.4%-retracement combination” from the 1977, 2011 and 2019 highs, AND numerous “appreciation” from past lows. In the event we end-up getting a larger, “(5)-wave ADVANCE” off the Feb 6 low, however, then that will imply that we’ve actually finished A FAR MORE SIGNIFICANT, “Primary wave-[b]DECLINE”...from the Dec 2019 high. Under this count, the KEY, “Equal Waves [a]-and-[c]” projection, AND numerous other calcu-lations...suggest that THE MINIMUM TARGET WILL BE BETWEEN 149.45-AND-154.55. Near-term resistance is at 107.65, 109.05-109.50, 111.10 and 112.75-113.25(good!), with support at 107.90-107.25,105.80-104.30(best) and 102.60-101.95(good/max).

COCOA: IF BOTH the MARCH and MAY cocoa can REMAIN in a sideways-to-lower pattern for at least another week or two, then there’s a reasonable chance that we’re in a “wave-(4)”, of the same-degree as the Nov-Dec drop. In which case, once the next move-up to new highs occurs...we could be in THE FINAL, “wave-(5)-of-[c]SECTION UP”. Given this scenario, however, IF the nearby contract posts A STRONG CLOSE-ABOVE OUR KEY, 3026-3058 RESISTANCE AREA, then prices could “blow-off” to either or our two next higher resistance levels...AT 3160-3165, AND/OR 3301-3304. Of course, on the other hand, IF we end-up HOLDING our longstanding, OPTIMUM TARGET AT 3026-3058, then we’d obviously be looking to go short there. At any rate, regardless, because the overall advance from the 2017 low (1770) continues to look like A BEARISH, “[3]-wave” pattern, once it’s possible to label EITHER a completed, “Single”, OR “Double-Three”, we ought to have A VERY GOOD SELLING OPPORTUNITY! At that point, my guess is that we’ll be HEADED FOR THE 2017 LOW AT 1770? Resistance for MAY is at 2818, 2853 and 2888-2896(good), with the support at 2805, 2775-2772(good), 2747 and 2723.


BEANS: HRT/HEDGERS rolled-out of short MARCH beans at 8.75 ½ for a $2,975 profit, and are now short MAY at 8.83 ½. Use a stop here at 9.14 1/4.

WHEAT: HRT/HEDGERS rolled-out of short MARCH wheat at 5.39 for a profit of $1,300, and are now short MAY at 5.37. Use a stop here at 5.69 1/4.

COTTON: HRT/HEDGERS rolled short MARCH cotton at about 67.05 for a profit of $1,270, and are now short MAY at about 67.00. Use a stop here at 70.31.

SILVER: HRT can roll their long MARCH Mini Silver to the MAY contract at 7.50-CENTS PREMIUM MAY. Use a stop on MAY at 17.35.

CRUDE OIL: HRT are short an APRIL Mini Crude at 54.30(+$2,075). Use a stop at 53.45.

COFFEE: HRT are long MAY coffee at 106.65 (+$694). Keep the stop at 104.00.

DISCLAIMER Futures and Option trading involves substantial risk and is not a suitable investment for all types of investors. This Futures Market Report is strictly the opinion of its writer. Information is obtained from sources believed reliable, but is in no way guaranteed. The author may have positions in the markets mentioned including at times positions contrary to the advice quoted herein. Opinions, market data and recommendations are subject to change at any time. Past performance is not necessarily an indicator of future performance. Prices displayed in this written update were taken from real-time price quotes that took into account all known activity up to the point in time the price displayed was quoted. Brent Harris is registered as an Associated Person of Southwest Futures, Inc.

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