Update 2: April 2014 Vectorial Analysis for Cash and July Soybeans [updated]

 A previous update on market geometry mentioned the possibility of a reaction on the soybean market in April 09th 2014. However, the market only reacted for a couple of days and then resumed its uptrend, breaking above the April 09th high.

 There is a harmonic of Gann's 14 years cycle due for the present time. This time cycle is anchored at the September 12th, 2006 major bottom. A window of tolerance was calculated for this cycle between April 16th-20th. Initially, assuming an early April top, it was expected that this cycle would align with a market bottom. However, recent market action indicates that it could align with a market top instead.

 Both the cash soybean and July futures market are analyzed using Price-Time Vectors[1]. Both markets still indicate the possibility that a market top is just around the corner.

 This post will be reviewed and updated after the market closes and the USDA publishes its daily cash reports. [updated]

 July soybeans vectorial analysis

 This section is an update of the previous analysis done on July soybean futures.

 Figure 1 is a daily price-time chart for July soybeans. It contains several PTVs[1] whose lengths are related to the first Square of Twelve. This has been the rate of vibration of the market in the recent past. Once again, the theoretical lengths of these vectors are presented below:

• 1x144 = 144
• 2x144 = 288

Figure 1
Daily prices for July soybean futures from 2013 to 2014. PTVs lengths related to the first Square of Twelve and Gann's 14yrs cycle harmonic.

   

 The PTVs from the previous update indicating a top on April 09th are drawn in gray color.

  

 Figure 1 shows that the length of the vector defining the uptrending market from the bottom of January 24th to the current high in today's session is 281.82, which is close to the second Square of Twelve. Additionally the length of the PTV from March 24th bottom to the current intraday high equals the first Square of Twelve. This indicates the possibility that the rally from January is soon to be over.

 The reader can verify for himself that the three PTVs connecting:

• the bottom of Aug 07, 2013 and the reaction top of Mar 07, 2014;
• the bottom of Nov 05, 2013 and the high of Apr 09, 2014 and
• the bottom of Jan 24, 2014 and the current high

 are all equal to the second Square of Twelve. 

 Cash soybeans vectorial analysis

 The cash soybean market made final bottom on November 2013 and a secondary bottom on January 2014 form where the market has rallied with strength.
 

 Figure 2 shows three windows containing daily cash prices for soybeans at Decatur, Illinois from November 2013 to the present. Each window contains different PTVs defining the market action during this period.

Figure 2
Daily cash prices for soybeans at Decatur, Illinois from Nov 2013 to the present. PTVs defining market action and Gann's 14yrs cycle harmonic.

 

 Cash soybeans: left window from Figure 2

 The left window from Figure 2 shows a PTV defining the whole market movement from the final bottom of Nov 2013 to the present time. Its length, 280.23, is close to the second Square of Twelve, only 7.77 price-time units from a perfect Square of Twelve.
 

 Cash soybeans: center window from Figure 2

 The center window contains three PTVs. The first one defining the rally from November to December 2013 with length equal to 101.44. The second one defined the decline from December 2013 to late January 2014, length equal to 77.96. The third one defines the uptrend from January 2014 to the present with a length of 240.90. The sum of all three vectors equals 420.30, which is close to the third Square of Twelve (3x144 = 432). Only 11.70 price-time units from a perfect Square of Twelve.
 

 Cash soybeans: right window from Figure 2

 The last window from Figure 2 contains PTVs defining smaller trends. The first two vectors are the same from the center window of Figure 2. The next one, defined the rally from January 2014 to the reaction top of March 2014, with length equal to 183.35. The fourth PTV defined the reaction from early to mid-March, with a length of 70.06 or half a Square of Twelve. The sum of these four PTVs equals 432.81 or the third Square of Twelve. After this reaction bottom, the market continued its uptrend.

 The last PTV of this sequence equals 125.81. The sum of all PTVs equals 558.62, which approaches the fourth Square of Twelve (4x144 = 576). However, it is not as close as the previous examples, as it is 17.38 price-time units from a perfect Square of Twelve.
 

 Conclusion

 Gann's 14 years cycle harmonic and market geometry hint the possibility that the soybean market could make a top this week. After today's close and when the USDA publishes today's cash soybean prices this blog post will be updated to review this analysis.

UPDATE

 Following is an update after the market close and the USDA cash reports have been published.

 Today's high remained at 1510c per bushel in the July contract. The PTV lengths remain the same as those in Figure 1. However, cash prices went up 17 1/2c, closing today at 1519 1/2c per bushel. Figure 2 shows the updated PTV lengths.

Figure 3
Daily cash prices for soybeans at Decatur, Illinois from Nov 2013 to the present. PTVs defining market action and Gann's 14yrs cycle harmonic. Updated to April 16 2014.

 Cash soybeans: left window from Figure 3

 The left window from Figure 3 shows a PTV defining the market action from November 2013 up to April 16 2014. Its length, 296.84 is equal to the second Square of Twelve, or 2x144 = 288. The time component of this vector is 108 trading days.

 Cash soybeans: center window from Figure 3

 The updated sum of these three PTVs equals 437.61 or the third Square of Twelve, 3x144 = 432. The time component of the last PTV, defining the uptrend from January to April 16th, 2014 is 54 trading days.

 Cash soybeans: right window from Figure 3

 The updated sum of these five PTVs equals 576.01, exactly the fourth Square of Twelve, 4x144 = 576. The reader is encouraged to verify that the time components of each one of these PTVs are 25 to 28 trading days.

 
 Each one of these PTVs, or their sum is related to the Square of Twelve. More over, each rally or decline since Nov 2013 has lasted around 27 trading days. The complete rally from Jan to Apr 2014, lasted 54 trading days, or twice this amount. The complete rally from Nov 2013 to Apr 2014 lasted 108, or 4 times this amount.

 Conclusion

 These are indications that the cash soybean market may have made top on April 16th 2014, aligning with Gann's 14 years cycle harmonic. The futures market may have made top today, or it could make a slightly higher top tomorrow and then decline.

 There have been important tops in the month of April. However, it is important to keep in mind that April is not a month to expect extreme high prices or major trend changes. Following Gann's advice on rule 25: "Don't guess when the market is top. Let the market prove it is top." If these conditions hold and the market declines it would be an indication that a top has been made.

[1] PTV stands for Price-Time Vector. This concept was introduced by Bradley Cowan in his writings. Both PTV and Price-Time Vector are trademarks of Bradley Cowan.

 Update 3: April 2014 Cycle and Vectorial Analysis for July Soybeans

 

Ricardo Da Costa

Grain Market Analysis