After the much anticipated November-2014 cycles the soybean market has remained in a sideways motion unlike the corn and wheat market which have shown gains after the October and November cycles.
Since late October thru all of November and December the soybean market has been trading in a range. March soybeans futures made a higher top on November 12th at 1089 3/4¢ and a lower bottom on December 3rd at 991¢. The market has been unable to break above-below this prices, showing no definite trend.
Figure 1 is a daily price-time chart for corn and wheat back-adjusted continuous futures contract, ZC-067 and ZW-067 respectively [1]. It shows two bottoms in early and late November 2014 from which an advance took place.
 |
| Figure 1 Daily prices for corn (left) and wheat (right) futures. 2-day swing chart showing two November 2014 dates from which prices had an advance. |
The wheat market in particular has had a great advance since the October bottom. The corn market has rallied but not with such strength.
Figure 2 is a daily price-time chart for soybean back-adjusted continuous futures contract ZS-067. It shows the initial rally from early October until the mid-November top. It is clear from Figure 2 that the market has remained in a sideways motion.
 |
| Figure 2 Daily prices for soybean futures. 2-day swing chart showing a sideways market behavior since November 2014. Red arrow indicate strong resistance at 1067¢. Black arrows show bottoms that could have aligned with Gann's 45yrs, 20yrs and 14yrs cycles. |
The red arrows in Figure 2 show that the market has found strong resistance around 1067¢ making tops at 1066 1/4¢, 1061 3/4¢, 1067 1/4¢ and more recently 1068 1/4¢. A definite break above those levels would be a strong indication of higher prices.
Summary
The much anticipated month of November 2014 brought nothing but a trendless market for soybeans. Corn and wheat market did rallied from October and November bottoms.
Soybeans has been trading within a range, finding strong resistance at around 1067¢. Breaking above that level would be a first indication of higher prices and a bullish trend. Let's hope 2015 does not resemble the years 2006 and 2011 which were difficult trendless years.
[1] Chart drawn using free charting software Gannalyst Professional 5.0 which includes several basic Gann techniques.
Ricardo Da Costa
Grain Market Analysis
No comments:
Post a Comment