Soybeans - December 2015

This is our December 2015 roadmap for the soybean market. It includes a cycle analysis and a weekly momentum chart which are indicating a possible rally and trend change.

Edit: We are adding a harmonic of Gann's 14yrs cycle to our cycle analysis. This harmonic is expected to turn in mid-December 2015. Even though it is not a very powerful cycle, this harmonic has aligned with some important turning points in the past and may impact prices during this month.

 Cycle analysis

 Figure 1 is a daily price-time chart for continuous back-adjusted soybean futures from 2013 to the present. It shows a Gann's 45yrs cycle harmonic (in red) turning in late November-early December. This cycle was initially presented in our 2015 soybean roadmap and has aligned in the past with important market bottoms.
 

Figure 1
Daily prices for continuous back-adjusted soybean futures from 2013 to 2015. Gann's 45yrs (red) and 20yrs (magenta and green) cycle harmonics turning in late November-early December.

 The chart also includes a couple of harmonics of Gann's 20yrs cycle (magenta and green.) These harmonics are also turning in late November-early December but are not as reliable as other 20yrs cycle harmonics we have employed in the past. However, they are most likely still useful to narrow down the turning date of Gann's 45yrs cycle harmonic.

 Edit: Figure 2 is a daily price-time chart for continuous back-adjusted soybean futures. It contains a harmonic of Gann's 14yrs cycle expected to turn during mid-December 2015.

 Recently, this harmonic aligned with the Aug 2013 and late September 2014 bottoms. We have calculated a window of tolerance for this cycle between December 14 to 22nd.
  

Figure 2
Daily prices for continuous back-adjusted soybean futures from 2014 to 2015. Gann's 14yrs cycle harmonic turning in mid December 2015.

  

 Momentum analysis

 Figure 3 is a weekly price-time chart for continuous back-adjusted soybean futures from 2014 to the present. The chart also includes three momentum curves calculated for 1, 3 and 5 weeks in black, red and blue colors, respectively.
 

Figure 3
Weekly prices for continuous back-adjusted soybean prices from 2014 to 2015. Momentum calculations for 1 (black), 3 (red) and 5 (blue) weeks. Bullish divergences indicating rallies.

 It is highlighted in the chart that a bullish divergence between price and 5-week momentum has signaled every important rally during this bear market. At the present moment, the market is again under a price-momentum divergence. As mentioned above, Gann's 45yrs and 20yrs cycle harmonics are expected to turn right now.
 

 Summary

 Gann's 45yrs and 20yrs cycle harmonics are due to turn between late November and early December, edit: while Gann's 14yrs harmonic is turning in mid-December. The 5-week momentum curve is showing a bullish divergence against market price action.

 On November 23, 2015 soybean futures made a bullish reversal day which, at the moment of this writing, is defining a swing bottom.

Update: Soybeans - December 2015 

 Ricardo Da Costa

 Grain Market Analysis