Velocity Price Projections for May Soybeans

 In this post, we present several price projections using market velocity for soybean May futures. Additionally a small harmonic of Gann's 84 years cycle is presented which is due to turn in early March 2015.

Cycle analysis

 Figure 1 is a daily price-time chart for cash soybeans. It contains a harmonic of Gann's 84 years cycle anchored at the Oct 2001 major bottom. Most of these harmonics have aligned since 2001 with several tops and bottoms.

Figure 1
Daily cash prices for soybeans at central Illinois from 2001 to 2015. Harmonics of Gann's 84 years cycle.

 From Figure 1 it is possible to see that some of the most relevant turning points this harmonic has aligned with are the bottom of Oct 2002, the major top of July 2008, the top of June 2009, the major bottom of May-June 2010, April 2013 bottom.

 This harmonic is due to turn in early March 2015. A window of tolerance for this cycle can be expected to be between Feb/28 and Mar/09.

 Velocity Price Projections

 Figure 2 is a daily price-time chart for soybean May futures together with a market velocity indicator. Several price projections are shown, including those pointing to the late January bottom. In our previous post we wrongly stated that even though the market reacted after reaching those projections a bottom was not in place. However, the market rallied 77¢ for a whole month. The comment section of our previous contains a short discussion regarding the Feb 11 secondary bottom and geocentric eclipse positions.

 

Figure 2
Daily prices for May soybean futures from 2014 to 2015 and velocity indicator. Velocity Price Projections reached on Jan 30, 2015 at 961 3/4¢. Additional price projections on the uptrend.

 The price projections clustering around 1040¢ were met on March 02, 2015. The market reacted several points after reaching it.

 Summary

 There is a cycle harmonic of Gann's 84 years due to turn in early March 2015. Additionally, a couple of Velocity price projections were touched at 1039¢ and the market reacted strongly for the day. This is 7 years from the spike top of March 2008.

 Up to this moment, since Nov 2014 the market hasn't show a great deal of movement, remaining in a trading range. It is important to mention that if the Nov 2014 top is going to hold, the market should decline for this year, possibly into Oct-Nov 2015 bottoms. But statistically, March is not a good month for trend changes. It is in fact, the month in which soybeans is less likely to change trend.

Quick Update on May Soybeans 

 Ricardo Da Costa

Grain Market Analysis