Update: Mid-2014 Soybeans Cycle and PTV Analysis

 In our last update we talked about the possibility that soybeans could rally for the rest of the year going close to or above 1650¢ per bushel in November 2014 aligning with Gann's 45 years cycle harmonic.

 We also mentioned that even though we were expecting a top in May 2014 we underestimated it, thinking that the market would rally shortly after and continue with its uptrend. Instead the market had a great decline.

 The present post addresses the possibility that a rally could be under way based on cycle and PTV[1] analysis. An important harmonic of Gann's 14 years cycle was due to turn between July 22nd-26th. It coincided with the completion of PTVs related to the Square Of Twelve in both the cash and futures markets.

 Cash soybeans cycle and PTV analysis

 Figure 1 is a daily price-time chart for cash soybeans at Decatur, Illinois from 2008 to the present time. It contains the harmonic of Gann's 45 years cycle due to turn in November 2014. It also shows two important harmonics of Gann's 14 years cycle turning in late July 2014.

 

Figure 1
Daily cash prices for soybeans at central Illinois from 2008 to 2014. Harmonics of Gann's 45yrs and 14yrs cycles. A PTV projection from 2008 to 2014 and PTVs related to the Square of Twelve completing in July 2014.

 Figure 1 shows that these harmonics of Gann's 14 years cycle aligned with the spike top of March 2008, the secondary top of early July 2009 and the final bottom of December 14th, 2011. As mentioned, they are again due to turn in late July 2014.

 At the time that this cycle turns in July 2014, a couple of PTVs are completing. The PTV defining the decline from the last top of May 2014 measures 290, which is equal the second Square of Twelve. Also, the PTV defining the market action from the secondary top of late July 2013 equals 431.47, or exactly the third Square of Twelve.

 Note that this last PTV has the same length as the one defining the decline from late Aug-early Sep 2012 to Apr 2013. Additionally, late July 2014 is an anniversary from Jul 2013 top and the all time high cash top of July 2012.

 The 2008-2014 PTV projection from our last update is included here as well, as a possible price-time target if cash beans rallies.

 November soybeans cycle and PTV analysis

 Figure 2 is a daily price-time chart for November soybean futures from 2013 to 2014. As in the previous figure, it contains both the harmonics of Gann's 45 years and 14 years cycles.

 

Figure 2
Daily November soybean futures from 2013 to 2014. Harmonics of Gann's 45yrs and 14yrs cycles. PTVs related to the Square of Twelve completing in July 2014.

 Figure 2 shows that since late August 2013 there are several PTV with lengths related to the Square of Twelve in November beans. PTV AB, defining the initial decline from August to October 2013 measured 147.96, or the first Square of Twelve.

 Between late August and mid-September 2013 there was a multiple top formation. PTV A'C which defined the decline from mid-September top to the late January 2014 bottom measured 325.90, or the first Square of Twelve times the square root of five, √5 x 144 = 321.99.

 PTV CD, which defined the uptrending market from January to the top of May 2014 measured 206.08, which equals the first Square of Twelve times the square root of two, √2 x 144 = 203.65.

 The last PTV, DE, defining the decline from May to July 2014 measures 227.90. The sum of PTVs CD + DE = 433.98, which is the third Square of Twelve, or 3 x 144 = 432. Additionally, PTV A'E which would define the complete market action from mid-September 2013 to late July 2014 equals 406.51, or 2√2 x 144 = 407.29.

 Summary

 There is a projection indicating that cash soybeans could go near or above 1650¢ per bushel if it aligns with a top in Nov-2014 and Gann's 45 years cycle.

 If this is true, prices should rally in the near future. With this in mind, there are a couple of harmonics of Gann's 14 years cycle turning in late July 2014. At the same time there are several PTV completing in the cash and futures markets. These could indicate that a rally is due thus taking prices higher.

 However we think it is important to keep in mind that the typical soybean behavior after a May top is to decline all the way into seasonal lows in October, or into an August-September 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.

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