Update 2: May 2014 for July and December Wheat

 Our last update on the wheat market discussed a couple of cycles due to turn around late May early June 2014. It also included a PTV[1] projection for July wheat futures.

 The market continued to decline after the update was published, thus exceding the PTV length initially calculated. However, we are still inside the window of tolerance for those cycles. An update on the PTV projection for July wheat is made together with a PTV projection for December wheat. A momentum analysis is included.
 

July wheat vectorial analysis

 Figure 1 is  a daily price-time chart for July wheat futures from 2013-2014. It is an updated chart from our previous post. It contains the subdivisions of Gann's 20 years and 12 years cycle due to turn in May-June 2014. It also shows the PTVs defining the market action since January 2014 bottom.

Figure 1
Daily prices for July wheat futures. Cycle harmonics of Gann's 20yrs and 12yrs cycles and PTV projections for late May-early June 2014.

 Two PTV projections are made for the last PTV from Figure 1, which might define the end of the current decline:

• The first one considers the PTV measuring 198.07 which defined the uptrend from January to early May 2014 (red). In the previous update it was mentioned that this contract has been vibrating according to 216. If the sum of these two PTV equals √2 x 216, the last PTV should measure 107.40.
• The second one takes in consideration the smaller PTVs (pink) which defined the three swings on ending at the top of early May. If the sum of these four PTVs equals the third Square of Twelve or 2 x 216, the last PTV should measure 115.26.

 Both projections were exceeded last week. Nevertheless, July wheat futures made a low at 625 1/2c on Friday afternoon which is close to late February reaction top at 624 3/4c. Additionally, the reader may want to review on his own how many trading days took each swing since January.

 December wheat vectorial analysis

 Figure 2 is a daily price-time chart for December wheat futures from 2013 to 2014. It contains a vectorial analysis similar to the one made on July futures.

Figure 2
Daily prices or December wheat futures. Cycle harmonics of Gann's 20yrs and 12yrs cycles and PTV projections for late May-early June 2014.

 Again, two PTV projections are made for the PTV defining the last decline in December 2014 from Figure 2:

• The first projection considers the PTV from January to May 2014 (red) measuring 198.54. If the sum of these two PTV equals √2 x 216, the last PTV should have a length equal to 106.93.
• The second one takes into account the PTV defining the three swings starting from January 2014 (pink). If the sum of these four PTV should equal √2 x 288, the last PTV would measure 107.10

  Both projections are very close to 108, which is half 216. Both were met on Friday when the December wheat made a low at 658 1/2c.

 Momentum

 Figure 3 is a daily price-time chart for July wheat futures together with three momentum curves. As in previous analysis, the momentum indicator are calculated to 1, 3 and 5 trading days.

Figure 3
Daily prices or July wheat futures and momentum indicators. Divergence between price action and momentum curves showing a possible rally.

 Prices have been declining since early May making lower bottoms. However, just recently, all three momentum curves are making higher bottoms indicating that a possible rally is due in the near future. Both the 5-day and 3-day momentum curves are diverging as well as the faster 1-day curve, which helps as a confirmation.

 It is important to keep in mind that sometimes the momentum curves give false signals or it takes more than one divergence to revert the market trend.

 Conclusions

 Cycle turn dates were presented in a previous update. Several PTV projections were made which were exceeded in July futures, but exactly met in the December contract. The momentum curves are diverging against market price action, indicating a possible rally.

 Next week will be crucial to confirm if these projections are correct and the wheat market rallies, hopefully resuming its uptrend.

 [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.

Wheat - July 2016 

 Nadiel Outis

Grain Market Analysis