Leg Five?
Soybeans are continuing to hold, and rally, above the 50%
retracement of their June rally. As mentioned in last Friday’s Futures
Market Recap, beans could have one more up-leg to go in a five-wave Elliot
wave pattern. Today’s gap open works to refute the island-top argument of July
11-19. The up move is also a continuation out of yesterday’s (and today’s) Pullback From Highs
reading.Â
Corn is also exhibiting a very strong pattern: it has
lapped or gapped higher in each of the past three days to close the July 18
gap-down. Each of these signals works toward achieving a “critical
mass” of laps, gaps or thrusts, something Mark Boucher watches closely
for. Three of the past four bars also qualify as thrusts and the four up-bar
pattern is itself a strong constructive indication. The last three days have
triggered Pullback From Highs
signals. Also take note that after gapping open, corn has provided entry in
Haggerty Slim Jim patterns for the past three sessions.Â
August feeder cattle
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and made good on an Off The Blocks short entry. At this point, my interpretation
of the lap-down opening is that of a break of a down-sloping neckline out of a
down-sloping right shoulder of a head-and-shoulders top. Using traditional
measured move analysis, this suggests feeders will fill the gap window left back
from May 15. However, today also sets up a Turtle Soup reversal, which could occur either today, tomorrow or within a few days. If there is a bounce higher,
it is likely to be subdued as there is heavy resistance at 89.750.Â
Also mentioned in the meats and highlighted in recent
commentaries, August pork bellies
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market and just triggered an Off The Blocks long entry to set a new contract
high.Â
August lean hogs
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New 10-Day Highs yesterday (thereby defining it as a nascent momentum market
and eligible for an Off The Blocks long entry) is also rallying. Notice how its
opening five-minute expansion bar is very strong and working to solidify
today’s momentum in this contract.Â
Debt futures are up slightly and have bounced off lows
that held at support pointed out in the Levels From The Bond Pit. September T-bonds
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and 10-year notes
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contracts and could get going in a flight-to-safety play if the stock market
cascades and/or if economic reports (such as tomorrow’s GDP) deteriorate. GDP consensus
is for 1%.