Update: Soybeans - January 2016

 As mentioned in our previous post, this update for the month of January focuses on Gann's 30yrs cycle. 

 There is a small harmonic of this cycle turning in late January-early February. However, a larger harmonic of this same cycle, which is slightly time-shifted, is due to turn between early to late February. The period of this larger harmonic averages 7.5 years and it has aligned with very significant turning points since 1986.

 Gann's 30 years cycle

 Small harmonic

 30 years is one of the major time periods discussed by Gann and Cowan. Figure 1 is a daily price-time chart for cash soybeans from 2008 to the present time. It shows the small harmonic of Gann's 30yrs cycle turning in late January-early February.
 

Figure 1
Daily cash soybean prices in central Illinois from 2008 to 2016. Gann's 30yrs cycle harmonic aligning with several tops and bottoms. This harmonic is due to turn in late January thru early February 2016.

 It is clear from Figure 1 that this harmonic has aligned with several tops and bottoms in the past. From the chart are particularly important:

• the historic top of July 3rd, 2008,
• the acceleration bottom of November 17th, 2010,
• the June 5th, 2013 top and
• the more recent Oct 1st, 2014 bottom.

 The 2013 top was predicted by Cowan in his book Market Science Vol. II as it was half a cycle from the major 1999 bottom.

 A window of tolerance for this harmonic has been calculated between January 28th until February 4th, 2016.

 Larger harmonic

 Figure 2 is a monthly price-time chart for cash soybeans from 1984 until 2016. A larger harmonic of this same 30yr Gann cycle is shown on this figure. The chart shows that this harmonic has aligned with very important turning points in the past:

• September 11, 1986 bottom (multiple bottoms took place during that time)
• October 7th, 1994 bottom,
• October 22, 2001 bottom and
• July 03 and 11, 2008 tops.

Figure 2
Monthly cash soybean prices in central Illinois from 1984 to 2016. A major harmonic of Gann's 30yrs aligned with several important trend changes in the past. This same harmonic is due to turn in February 2016.

 The reader can see from Figure 2 that very big moves have followed after each one of these bottoms and tops.

 A window of tolerance for this cycle harmonic has been calculated between February 9th to 26th, 2016. This window comes a little later than the one calculated for the smaller harmonic.

 Anniversary dates

 W.D. Gann recommended reviewing anniversary dates from past important turning points. He also advised to count 6 and 4 months from any important top or bottom as the market often times turns around those dates.
 

Figure 3a
Daily continuous back-adjusted prices for soybean futures. Early February dates aligning with market trend changes. February is 4 months from October, 6 months from August and 8 months from June dates.
Figure 3b
Gann emblem as calculated by Gannalyst software showing important dates related to early February.

 Figure 3b contains the Gann Emblem as calculated by the Gannalyst software. We have selected and highlighted February 5th as an important date for trend change in the market because there have been past turning points around that date. It is six months from August 6th. Also, four and eight months from October and June 6th, respectively. All these dates are relevant during the year as can be seen from Figure 3a.

 Very late January and early February shape as a possible time when Gann's 30yrs cycle could turn.

 Summary

 Gann's 30yrs cycle is due to turn early this year. According to our calculations this cycle should impact prices between very late January until the month of February.

 It is not uncommon to see important bottoms during the first days of February. According to our seasonal trend studies and as mentioned by W.D.Gann in his book 'How to make Profits Trading in Commodities' the early part of the year, particularly the month of February is important for soybean market bottoms.

 Soybeans - February 2016

 Ricardo Da Costa
Grain Market Analysis