November 2014 - January Beans

 In our 2014 soybean roadmap we mentioned November 2014 as an important month regarding cycles. Three major cycles are due to turn during this month, namely Gann's 45 years, 20 years and 14 years cycle harmonics.

 The present post updates some of these cycles and discusses the possible behavior of soybeans for the recent future.

 Cycle Analysis

 Figure 1 is a daily price-time chart for continuous back-adjusted contract for soybean futures (ZS-067). We present this graphic using this chart because it doesn't contain contract roll-over gaps. Figure 1 shows Gann's 45 years, 20 years and 14 years cycle harmonics turning in November 2014.

 

Figure 1
Daily prices for soybean futures back-adjusted contracts ZS-067. Harmonics of Gann's 45yrs (red) 20yrs (green) and 14yrs (blue) due to turn in November 2014.

 The red cycle line corresponds to Gann's 45 years cycle harmonic. As presented in previous posts, it was due to turn on Nov/11-12/2014 with a window of tolerance between Nov 1st to 14th. January beans made a 2-day swing top on November 12th, 2014 at 1086 1/4¢. Our 2014 soybean roadmap presented a triangular wave pattern indicating the possibility that this cycle could align with a market top.

 The green cycle line corresponds to Gann's 20 years cycle harmonic. This cycle aligned with the May 22nd, 2014 top and is due to turn again around November 2014. It has a window of tolerance between Nov 09th to 15th extending to the 18th-19th if we set its starting point on July 25, 2012 bottom (as we did in Figure 1.)

 Finally, the blue cycle line corresponds to Gann's 14 years cycle harmonic. This cycle aligned with the early January 2014 bottom. This harmonic has a window of tolerance between Nov 17th to 20th or even extending to Nov 30th and early December if we take in consideration the early June 2012 bottom instead of the late May 2012 bottom.

 Summary

 We have presented an update on these three cycle harmonics turning in November 2014. It is possible the soybean market is making a top formation which would align with these cycle harmonics. If this is the case, prices should decline even further.

 Gann's 45 years and 20 years cycle harmonics could have aligned with the 2-day swing top of November 12th. Gann's 14 years cycle harmonic is due to turn in the later part of the month, meaning it still could align with a secondary top if prices are really due to decline. 

 Update: November 2014 - January Beans

 Nadiel Outis

 Grain Market Analysis