FUTURES JUNCTURES
(January 19, 2001) CME PORK BELLIES: Pork bellies are setting up for a major drop to new lows. On the daily continuation chart, prices are about to test the 71.40 peak. Once above this peak, prices would complete wave C of a larger correction from 57.87. Then, get out of the way as prices plunge to new lows. Once at new lows, bellies would complete another pattern, an impulse wave from 101.10. The Wave Principle suggests that after an impulse wave completes, prices maneuver in the biggest correction since the beginning of the first wave in the impulse. Many times prices seek out the end of the previous fourth wave. In this case, that would carry prices back up to 71.40, the end of wave (4).
Pork Bellies (Daily Continuation)
Data Courtesy CQG
©January 2001 Elliott Wave International
CBOT U.S. 30-YEAR TREASURY BONDS: We recently monitored this market for
a top in our short-term service, Daily Futures Junctures. Bond prices fell
sharply to 104-03 in an undeniably impulsive drop. Then they bounced to
105-24 in a choppy corrective rise. From there, we saw an opportunity for
another down leg. That is exactly what we got, as prices plunged to a low
of 102-24 before we exited this contract. At this juncture, we believe
that the entire decline from 106-20 is a zigzag that counts best as a fourth
wave. If correct, there will be a bullish reversal that completely retraces
this weakness back to 106-24. Jordan Kotick, EWI Senior Interest Rate Analyst,
concurs that prices are headed up toward a challenge of the 106-20 peak.
Treasury Bond (March Contract) Hourly
Data Courtesy CQG
©January 2001 Elliott Wave International
CSCE COCOA: In late November, we told Reuters News Service that cocoa was
coming into a major low. Cocoa obviously heard our call as it ended its
entire bear market from the December 1997 peak at 1766 (basis weekly) by
bottoming at 674. This bottom completed a highly reliable Elliott Wave
pattern called an "ending diagonal triangle." The Wave Principle
suggests that once this type of pattern ends, prices resolve in a swift
and sharp manner back to the origin of the pattern, or back to 1058 (basis
March). Currently, prices are yielding a larger rally that has taken out
the wave (4) peak at 929. They are also within striking distance of the
1058 target. Reuters called us again about cocoa on January 18. We told
them "it's not over yet. I think we will get to our $1058 target,
or $1168 on the weekly chart."
Cocoa (Weekly Continuation)
Data Courtesy CQG
©January 2001 Elliott Wave International
Cocoa (March Contract) Daily
January 19, 2001 Mark A. Schimmel Elliott Wave International P.O. Box 1618, Gainesville, Georgia 800-336-1618Data Courtesy CQG
©January 2001 Elliott Wave International