Soybeans - July 2015

 As has been our custom in the last few months we are presenting a short roadmap for the month of July 2015 for the soybean market.

 There is a harmonic of Gann's 20yrs cycle due to turn in early July as presented in our 2015 soybean roadmap. According to seasonal tendency, extreme high prices are typically expected in the month of July. These are the reasons why we anticipated a cycle top for the current month in the second part of our 2015 soybean roadmap.

 Cycle analysis

 Figure 1 is a daily price-time chart for July beans. It is an update of the chart presented in our June 2015 soybean roadmap. It shows how Gann's 30yrs cycle harmonic aligned with the early June bottom which gave way to the strongest rally since the November 2014 top. Figure 1 also contains the harmonic for Gann's 14yrs which was due to turn in late June. Together with aforementioned Gann's 20yrs cycle harmonic these cycles were expected to top around this time of the year.

 

Figure 1
Daily prices for July soybean futures. Gann's 30yrs cycle harmonic aligned with June 2015 bottom. Gann's 14yrs cycle harmonic due to turn in late June 2015. PTV[1] lengths related to the Square of Twelve during the Nov 2014-May/June 2015 bear market.

 

 Figure 2 is a price-time char for daily November soybeans. It contains harmonics for Gann's 14yrs and 20yrs cycle due to turn in late June - early July 2015.

 

Figure 2
Daily prices for November soybean futures. Gann's 14yrs and 20yrs cycle harmonics turning in late June, early July 2015. PTV lengths related to the Square of Twelve.

 

 There are other cycle harmonics turning during the month of July 2015. However, we believe the most important one is Gann's 20yrs cycle harmonic presented in Figure 2.

Geometry analysis

 Figure 2 contains several PTVs which defined larger and smaller swings since the bottom of October 2014.

 The sum of PTVs xa and ah which defined the upswing from October to November 2014 and the complete leg down from there to June 2015 is equal to the third Square of Twelve or 432. That is,

 xah = 185.20 + 240.41 = 425.61

 The sum of the three smaller PTVs defining the up and down swings from November 2014 until the late January 2015 bottom equals the second Square of Twelve or 288:

 abcd = 118.08 + 72.28 + 102.15 = 292.51

  Similarly, the four PTV defining the rest of the swings until the June 2015 bottom also add up to the second Square of Twelve:

 defgh = 67.77 + 74.76 + 45.79 + 96.90 = 285.22

 Adding up the lengths of these seven vectors yields almost exactly the fourth Square of Twelve or 576. This is:

 abcd+defgh = 292.51 + 285.22 = 577.73

 Up until now, the rally from June 2015 measures 142.67 or the first Square of Twelve. This upswing is greater than any of the previous upswings since November 2014, proving there has been a trend change. However, so far it hasn't been greater than the leg up from October to November 2014.

 Summary

 A review and conclusion of the previous month roadmap has been presented showing how Gann's 30yrs cycle aligned with June's bottom. Also, the most important time cycle due to turn in July 2015 has been discussed together with a geometry analysis.

 Our initial thought based on seasonality and time cycles indicated the possibility of a market top for the current time, followed by a secondary top around September. It is still wise to hold on and see if these cycles will in fact align with a top or an acceleration bottom.

 [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: Soybeans - July 2015

 Ricardo Da Costa

 Grain Market Analysis