Cocoa Futures: Technical Picture from 2011 low

Cocoa Futures (CC #F) has ended the cycle from all time low at 3775 (March 2011) and then it made a sharp decline into 12/12/2011 low at 1983. Since then, we have seen Cocoa futures rallying in 5 swings which is a bullish sequence. Advance from 12/12/2011 (1983) low to 12/8/2015 (3429) was an overlapping advance and hence not impulsive but 5 swings could be part of a diagonal structure or the cycle could have ended at 9/25/2014 (3399) and instrument could be doing an expanded FLAT (3-3-5) structure down from there with 12/8/2015 peak being wave B of the proposed FLAT. In either case, 5 is not a corrective sequence and hence 5 swings up from 12/12/2011 low means unless 5 swings are part of a FLAT correction, 12/8/2015 high should break before 12/12/2011 low breaks. As instrument has not yet reached the 100% extension from 12/8/2015 peak so we can expect bounces to fail for extension lower towards 254 – 237’4 area and in extension 210’6 and then Cocoa futures should find buyers and resume rally for new highs above 12/8/2015 peak or bounce in 3 waves at least as per Elliott wave hedging concept which means both buyers and sellers would agree in a 3 wave bounce at least in the mentioned area.

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