Weekend Update #1

SOYBEANS The magical fruit has put us in a bind. It broke through critical resistance levels, most importantly, the 6/11 H at 1099.

That is a rule breaker. Wave 2 can not retrace more than wave 1. The price action down to the 871 L can only be corrective. b apparently needs additional work.

There are two scenarios I show to accomplish this:

1.) Primary [C] has not completed (count on chart). This would entail intermediate (3) finishing at the 1099 H, while (4) finished at the 871 L. [C] would then be completed at the conclusion of this set of minor waves, which appears close.

A couple of issues come with this interpretation. (4) enters the price territory of (1), however, not on a close basis. Additionally, the size and scope look way out of proportion compared to (2), in fact, it rivals primary [B] in price and time.

2.) Primary [C] completed at the 1099 H - as in my original count. The 871 L finished a primary [X] wave (alternate count). This means that beans would be tracing a double zigzag.

This is totally counter to what the other grain markets are doing.

This is a chart of the September Composite contract. Notice it has not taken out the 6/11 H. The November contract has the same structure. The chart above is the continuous contract.

See the dilemma were faced with? Perhaps the continuous contract is front-running what will eventually happen to the near month eventually. I'm not real sure folks.

For this reason and the fact that the rest of the grain markets are decidedly bearish, I have adopted the imperfect count of primary [C] not completing as of yet. I'm blaming the Chinese for buying up all the beans and causing this mess.

As mentioned above, it appears that minor 5 should be completing very soon. Here is a look at the subwaves.

As noted on the chart, 5 = 1 at 11170. The 61.8% projection of 1-3 comes in at 11812.








WHEAT The wheat market pushed hard to the downside after finishing its primary [4]th. In the process, wheat made new multi-year lows.

Last week I mentioned that there was a trend line connecting the 12/5/08 L and the 4/20/09 L that should provide resistance on the counter-trend rally. It did not disappoint. There was also the 127.2% projection of (A) in the same spot.

We should expect to see 5 intermediate waves down that will complete a very important bottom. I would not be surprised to see [5] extend.

The minimum objective would be the 61.8% of [1] - [3] at 437.50. I suspect we will see much lower price than that.


CORN The corn market pushed hard to the downside like wheat.

Price reached the 38.2% retracement level, which is a common retracement level for a 4th wave, before being turned back. Also, notice the nice alternation with wave [2].

At this stage, price action needs to take out the 304 L, which I'm confident will happen. Downside targets include 270, which is the 61.8% projection of [1] - [3] . The 2:1 of a sits at 266.50.

5 intermediate waves down will complete an important bottom.