Weekend Update - Grains

CORN
The corn market closed down on the week after looking like it might breakout in the early part of the week.

My current interpretation has the corn market in the beginning stages of intermediate wave (3) of primary [5] of cycle c . My alternate view is that we are tracing a primary [4] wave triangle.

There is the possibility that primary [5] completed at the 302 L, however, I don't believe this to be the case.

The 347.50 H held, which was a key level of resistance. Structure still has not given any definitive confirmation as to what it wants near-term.

Drilling down intraday, the leg up off the 310 L appears to be corrective. This suggests that we may have a smaller degree minor 1 and 2 in place. We can't rule out that (2) has not yet finished.

If I have assessed structure correctly, we should begin to see hard downside impulsive price action. Friday was certainly a good start.

Though not shown on chart, 3 = 161.8% of 1 at 286. Intermediate (3) = (1) at 276.75. This fits in with the minimum objective of [5] at 278.25.

Key levels this week remain the 347.75 H and the 310 L.

I have included a fib set should (2) need additional work, or primary [5] being complete.

All prices continuous contract.

SOYBEANS
The bean market sold off hard this past week, particularly on Friday.

Based on my interpretation, structure is in intermediate (C) of primary [B] of cycle b. My alternate view is that primary [C] completed at the 1040 H and we have started cycle c down.

I have added a second alternate at the bottom of the chart. This is a speculative primary degree [B] wave triangle.

It appears that intermediate (B) was in fact complete at the 977.75 H. This means that we are currently in (C), if this is correct.

We are very near the lower boundary of the channel line, which may act as support. It is unclear if 5 waves down are finished, as there is always the chance of an extension, but it does look close.

This would be a convenient place for structure to turn. If not, (C) = (A) at 829.75.

I don't see anything of importance in the cycle area scheduled for this coming week.

All prices basis continuous contract.

WHEAT
Nothing new in the wheat market this past week as it continued to sell off.

My interpretation of structure has wheat in minor 5 of intermediate (3) of primary [5] of cycle v. My alternate view is that primary wave [3] is still in process.

It appears that minor 4 has completed at the 477.25 H. If correct, the minimum objective for 5 = 61.8% of 1 - 3, which sits at 439. Equality with 1 comes in at 414.25.

Intermediate (3) = (1) at 417.50.

The first clue that wheat is bottoming, will be a decisive break of the channel. RSI continues to sport a positive divergence on the daily time frame. Something to watch.

We are scheduled for a KoolsTools cycle low on Thursday.

At this point, structure suggests the downside is unfinished.

All prices continuous contract.

Edit: failed to mention that there will be a full moon on Sunday, October 4.

ES

The equity markets experienced hard downside price action today. Range was an impressive (for the ES) 31.50 handles on another big volume day.

Has the "Great Bear" returned? Price action took out the last remaining level of support (1034.25) that would allow any bullish interpretation.

The preponderance of evidence suggests that we have topped. Is it THE top? That's yet to be determined, but I believe the odds are greater than 50% that we may have entered the next phase of this market.

I have replaced my count with the alternate scenario. This implies structure completed minor C of intermediate (Y) of primary [B] at the 1075.75 H.

Yes, it's far from that perfect idealized Elliott Wave structure, but it is what it is.

I am showing a 120 minute pit session chart because after the 1065.75 H it is a mess trying to get a clean count. Sub-minuette i finishing at the 1053.25 L is just a guess. It's more likely that it actually ended at the 1041.50 L. It's not all that important at this stage.

We should be close to finishing up a sub-micro degree wave structure (not shown).

The daily 1 bar projection sits at 1022. At a minimum, there should be some type of reaction once fulfilled.

The daily 50sma is currently at 1016.25, another level worthy of our attention.

Minuette degree targets include (iii) = 161.8% of (i) at 1002.25, and the 261.8% projection of (i) at 962.50.

Watch the base channel boundary line. This could be a support level.

As discussed in last nights post, I was forced to bail on my calls. I ended up netting out a profit, but chicken feed really. Not to bad when you can be 1000% wrong and still make some beer money :)

Bottom line - I have no choice but to be near-term bearish. There is just no bullish alternative. If your a bulltard, the best you can hope is that this is an intermediate degree (X) wave unfolding.

I suppose it's possible that we somehow finished minor A at the highs. There are better odds of me giving up VO. In other words - don't bet the ranch on it folks :)

It's time to sell this pig!

Crude

The crude pits were a little tamer today, which was not unexpected. Range was $2.26 on above average volume.

I show two separate ways of basically getting to the same place, same time, that is minuette (a) completing at the 71.39 H. Doesn't really matter which is correct, they imply the same thing.

It is possible that the 71.39 H finished the wave iii (or [3]), suggesting that there should be one more leg higher.

Notice the RSI divergence. This is suggestive that the move off the 65.05 L has finished, although, not a certainty.

If this assessment is correct, we should find ourselves in a (b) wave corrective. Once complete, we should see minuette (c) higher.

We did have what appears to be a nice flat off the highs that retraced to the 38.2% to the tick. I suppose it's possible for this to be (b), however, I don't believe that's the case. I would expect something bigger in both price and time.

Anybody notice how the crude market bucked what the dollar did today? Every market has their own structure. Sometimes they fit with other markets - other times they don't.

Crude

HUGE day in the crude pits. Price closed up almost 6% on big volume. Range was $4.50.

Well, obviously sub-minuette v was complete. I show that happened at the 65.05 L, which would have been on Friday. This should conclude minuette (c) and minute [c].

Structure off the bottom probably counts best as a double zigzag a wave, although I show a i on the chart. Regardless, we had a heck of a 3rd wave today, which is either a iii or [3] .

It appears that we finished whatever degree 3rd wave at the 70.72 H. If so, we are currently tracing a 4th.

If I have assessed structure correctly, we are working on the [d] leg of a minor B triangle. Price should not trade above the [b] wave high of 75.89.

We have to careful here as the waves start to contract, it is easy to over estimate the degrees.

Once [d] completes, we should see an [e] leg lower before we "thrust" up and out of the triangle.

iv should finish up fairly quickly then we should see a more meaningful retrace after v is done.

ES

The equity markets had a strange day. Big swings back and forth. Range came in at 22 handles, while volume was huge.

Based on my interpretation, we finished minuette (ii) down and then traced out a sub-minuette i and ii waves. Should this be correct we are setup for big upside day tomorrow.

I got my deep corrective, as we retraced 78.6% of (i). In the process, we actually busted the channel, but quickly regained it.

Notice that we came close to the same channel on the wave ii retrace. This is an important channel. We need to maintain this support for a continued bullish view.

We now have upside targets based on the initial structure of minute [v]. iii = 161.8% of i at 1075.75, while the 261.8% of i is at 1093.50. (iii) = 161.8% of (i) at 1089, while the 261.8% of (i) sits at 1118.50.

Someone mentioned the possibility of a bigger triangle setting up in eChat today. I looked at this scenario last night and came to the conclusion that it is possible, however, the leg up from the 1035.75 L clearly traced a 5 wave structure.

Remember, triangle legs are always 3's. I suppose this could be a "cheater", which does happen, regardless of what the purists say. It's possible, just low odds imo.

I got myself a slug of October 103 SPY calls this morning near the lows. They shook me out of 1/2 of them for a $.55 profit, but I still have plenty to take advantage of a very bullish (i)(ii) , i-ii scenario - should this play out.

It appears that the KoolsTools cycle low came in as expected.

Any trade below 1041.50 is cause for concern. I will dump my calls should we trade through that level. Although not a deal breaker for the bullish case, it severely wounds it.

Bottom line - I'm near-term bullish. Structure suggests we have higher price ahead. Should my assessment be incorrect, I will change my strategy accordingly.