Brent Harris Elliott Wave
Futures Market Advisory Service

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Wheat (Jan. 31, 2009)

While it’s UNLIKELY that a long-term bottom could have been hit this quickly in the wheat, as the February-to-December 2008 decline (13.34 ½-to-4.55) only lasted for about 10-months, it does look like a PRETTY BULLISH PATTERN WILL REMAIN IN FORCE UNTIL AT LEAST THE END OF FEBRUARY, 2009. Because the Dec.-Feb drop not only traced-out a very large, [a]-[b]-[c] pattern, but this decline also produced a rather "hefty" depreciation of about 66%, the current rally almost has to be of AT LEAST THE SAME-DEGREE AS THE MAY-AUGUST 2008 ADVANCE. In which case, prices should remain in a general UPTREND for about 3-months...MINIMUM. Of course, since it’s also possible that we are in a CYCLE-WAVE-B advance here, of the same-degree as the entire Feb-Dec 2008 drop, we could certainly see a MUCH LARGER, AND LONGER-LASTING ADVANCE. However, because this scenario does NOT fit well with either the corn, or soybeans, I’m inclined to focus on the more conservative count. To that end, my best guess here is that the larger movement off the Dec 2008 top is unfolding into a classic, DOUBLE-THREE formation. In which case, once the current, Primary wave-[x] rally off the December 2008 low is traced-out, prices should then stage a FINAL, [a]-[b]-[c] decline that will likely last for a similar duration to that of the first [a]-[b]-[c] drop, or about 10-months. So, while our longer term objective is to go short this market, the near-term formation looks pretty BULLISH...at least for another month or two. Note, because the Dec-Jan rally appears to have finished only an INITIAL, (a)-wave section up, we should have a good buying opportunity on the current, wave-(b) pullback. Once a wave-(b) decline ends, my BARE MINIMUM, UPSIDE TARGET for the ensuing wave-(c)rally is at about the 7.26 3/4-7.36 1/4 area. And, it’s also possible that prices could stretch as high as the 7.52 ½-7.59 and/or 7.91-8.02 ½ MAXIMUM RESISTANCE AREAS. Anyhow, while I do have good support for the nearby March wheat at BOTH the 5.71 ½-5.66 AND 5.52-5.43 levels, OUR BEST BUY-ZONE (for a wave-(b) low) is at 5.30-5.22 ½.

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