Update: Soybeans - November 2015

 In this post, we are updating the expansion/contraction sequence found in January soybean futures.

 

 Geometry analysis

 In our previous post we presented a sequence of vectors whose lengths were related to each other by an expanding √2 ratio. Additionally, there was also a more recent set of vectors defining a contracting √2 ratio sequence.

 Figure 1 is a daily price-time chart for January soybean futures. It is an updated chart from our previous post. The red colored PTVs[1] define an expanding sequence starting from early this year. The first PTV of the sequence measures 37.05. By expanding this value by the √2 ratio we obtain the following sequence: 37.05, 52.40, 74.10, 104.79, 148.20 and 209.59. The reader is encouraged to compare the above values with the actual PTV lengths from Figure 1. These values are related to the Square of Twelve as explained in our previous post. If this sequence is not yet over, the next expected value should be equal to 296.40.

Figure 1
Daily prices for January soybean futures. Gann's 45yrs cycle turning in November 2015. Updated sqrt(2) contraction and expansion sequences.

 Figure 1 also contains a set of PTVs colored in magenta starting from August 2015. The lengths of this sequence of vectors are decreasing by the √2 ratio. The first PTV of the sequence is 146.07. By contracting this value by the √2 ratio we obtain the following sequence: 146.07, 103.29[missing], 73.04, 51.64, 36.52. Once again, the reader is encouraged to compare these calculated values with those present in Figure 1.

 On November 06, 2015 January soybean futures made a daily low at 858¢. If this holds as a bottom it would create a triple bottom formation against August and September 2015 bottoms.

 Cycle review

 However, we are expecting a market bottom towards the end of the month which would align with Gann's 45yrs cycle harmonic. The reason to believe this because this cycle harmonic has aligned with important market bottoms since the year 2003. Figure 2 is a reproduction of Figure 1 from our 2015 soybean roadmap.

Figure 2
Weekly cash prices for soybeans at central Illinois from 2002 to 2015. Harmonics of Gann's 45yrs cycle. Cycle turn date due for late November 2015, expected as a market bottom.

 Summary

 We have presented an update on the √2 expansion/contraction sequences found in January soybean futures. Up to this point, the last PTVs of these sequences were completed on Nov 6th, 2015. If Nov 06th low holds as a bottom, we will be in a triple bottom formation since August this year.

 
 [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.

 Soybeans - December 2015

 Ricardo Da Costa

 Grain Market Analysis