Since March, soybean prices have been going up breaking all previous tops. This is a clear indication that the trend has changed. Up to this point, the market has been, more or less, following what we figured in our 2016 soybeans roadmap.
This post updates a chart from a previous post which showed PTVs[1] defining up and down trends in the recent past. It also contains a new chart showing several PTVs related to the recent May 10, 2016 swing top.
Geometry analysis
Figure 1 is a daily price-time chart for July soybean futures. It is an update of a chart posted in a previous blog entry. It shows several PTVs related to the Square of Twelve.
The sum of the last two PTVs from Figure 1 equals 146.92, which is the first Square of Twelve, indicating a possible final rally into a summer top. However, much larger PTVs completed on early May swing top, which makes us believe that Gann's 14yrs cycle turning in mid-May may have aligned with a top, and not with a bottom as we initially thought. Also, the momentum curve (not included in this post) is showing a bearish divergence.
Figure 2 is a daily price-time for July soybean futures from 2014 up until the present time. It contains a series of PTVs in red color since the October 2014 bottom which sum equals the seventh Square of Twelve or 1008:
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| Figure 1 Daily prices for July soybean futures for 2016. PTV lengths related to the Square of Twelve defining several legs up in the bull market starting March 2016. |
The sum of the last two PTVs from Figure 1 equals 146.92, which is the first Square of Twelve, indicating a possible final rally into a summer top. However, much larger PTVs completed on early May swing top, which makes us believe that Gann's 14yrs cycle turning in mid-May may have aligned with a top, and not with a bottom as we initially thought. Also, the momentum curve (not included in this post) is showing a bearish divergence.
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| Figure 2 Daily prices for July soybean futures since 2014. Larger PTVs completing at the May 10, 2016 top. The sum of PTVs in red equals the Seventh Square of Twelve. PTVs in magenta related to 1.5x144 (216), 2x144 (288) and 3x144 (432). |
Figure 2 is a daily price-time for July soybean futures from 2014 up until the present time. It contains a series of PTVs in red color since the October 2014 bottom which sum equals the seventh Square of Twelve or 1008:
164.51 + 220.4 + 143.58 + 221.02 + 258.94 = 1008.45 (7x144)
There are as well three PTVs in magenta related to the Square of Twelve. They connect the May 2016 top with other important turning points.
Summary
We still believe that June or maybe July should bring an important top from which prices should decline into Gann's 84yrs cycle harmonic bottom.
We initially thought that Gann's 14yrs cycle turning in mid-May was aligning with an acceleration bottom driving prices higher. However, it seems the market has made a top. The reaction was big enough to touch the 2% Stop Loss price, which generally works well.
[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.
Next Post: Soybeans - June 2016
[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.
Next Post: Soybeans - June 2016
Ricardo Da Costa
Grain Market Analysis
Hello, Thanks for the update.
ReplyDeleteAfter watching the Soybean market closely, there seems to be strong support currently at 1055 (approx)
This measures .875 of the MARCH LOW TO MAY 10th HIGH
.875 of the MARCH LOW TO MAY 3rd HIGH was 1021, another strong support which was never broken
PTV from April 8th to May 3rd was 146.74
First sign of a decline will be to break the .875 support at 1055
Also, the roadmap you posted doesn't show any 2016 dates, is that the right map with incorrect dates??
Stephen,
DeleteThanks for pointing that out. The roadmap shape was correct, but the dates had the wrong years. I'll comment on the rest later.
Are you using July futures for your calculations?
DeleteAfter trying to re-create some of your calculations, I found that sometimes you use floor + electronic combined, and other times its last in close. In this case, yes its July, and its floor + electronic.
ReplyDeleteI'm going to stick with your original analysis of a June/ July top.
The PTV mentioned above may be cloned into the future, from the low on the 6th of May. Some key angles and trend lines not broken enough for a decline at this stage.
Thanks, will monitor the market and see what happens over the next 4-6 weeks.
I pretty much just use cash prices from the USDA reports and electronic contracts, in this case for July ZS-087.
DeleteMay 3rd top was 1057¢. I think there is support at around 1042¢