Wheat - July 2016

 Just as with soybeans and corn, Gann's 84yrs cycle is due to turn during 2016 for the wheat market. This cycle is expected as a cycle bottom. In the case of wheat, the turning of this cycle may come a bit earlier than in other markets.

 This post discusses two cycles impacting prices for late June - early July 2016 in the wheat market as well as some PTV[1] analyses.

 Cycle analysis

 Figure 1 is a weekly price-time chart for cash wheat at St.Louis, Missouri. The chart shows a large harmonic of Gann's 84yrs cycle aligning with important bottoms in the wheat market. This is the same cycle Cowan analyses in his books regarding soybeans.

Figure 1
Weekly cash prices for wheat at St.Louis Missouri since the '70s. Gann's 84yrs cycle harmonics bottoming in June-July 2016.

 This harmonic of Gann's 84yrs cycle aligned with the major bottom of August 1986, a secondary important bottom in March 2001 and now is due to turn between mid-June to mid-July 2016.

 Figure 2 is a weekly price-time chart for December wheat futures. It shows the above mentioned Gann's 84yrs cycle harmonic (in red) together with two different harmonics of Gann's 14yrs cycle (in magenta and green.)

Figure 2
Weekly prices for December wheat futures since 2009. Gann's 84yrs cycle (in red) and Gann's 14yrs cycle harmonics (magenta and green) turning up in late June-July 2016.

 Gann's 14yrs cycle harmonics have aligned with several important tops and bottoms since 2009. Both cycles are due to turn together on late June thru early July 2016, probably aligning with Gann's 84yrs cycle bottom.

 PTV analysis

 Figure 3 is a daily price-time chart for cash wheat from 2014 to the present time. It shows several PTVs which have defined important up and down trends in the recent past.

Figure 3
Daily cash prices for wheat in St. Louis, Missouri from 2014. The sum of several PTV lengths is related to the Square of Twelve.

 Even thought its not shown in Figure 2, since the year 2009 the lengths of several PTVs which aligned with important tops and bottoms were related to the third Square of Twelve or 3x144 = 432. We were expecting another PTV with such characteristics to align with the next major bottom, but after the September-October 2014 bottom there hasn't been any.

 Nevertheless we are presenting a series of PTVs or sum of PTVs with lengths related to the Square of Twelve: 

 The sum of the lengths of PTVs ABCF in magenta is equal to 219.24 + 129.99 + 229.92 = 579.15 or the fourth Square of Twelve. This defined the drop from December 2014 until January 2016.

 The sum of PTVs ZAF connecting the September 2014 bottom, the December 2014 top and the January 2016 bottom equals 340.97 + 371.26 = 712.23 which is close to the fifth Square of Twelve.

 The smaller PTVs in blue Fg1h1G have a combined length of 138.02 + 68.74 + 81.74 = 288.50 or the second Square of Twelve.

 Finally, the PTVs in green color DEFGH together have a length of 76.69 + 81.88 + 166.58 + 99.96 = 425.11 which is almost the third Square of Twelve.

 Figure 4 is daily price-time chart for December wheat futures since 2014. It shows several PTVs with lengths related to the first Square of Twelve or 144.

Figure 4
Daily prices for December wheat futures since 2014. PTVs related to the first Square of Twelve either by integer or non-integer ratios. Possible bottom in July 2016?

 The reader can verify for himself that these PTVs are either directly related to the first Square of Twelve 144 or integer multiples or to non-integer ratios as √2x144 = 203.65, √5x144 = 321.99 and √10x144 = 455.37.

 It is worth mentioning that the sum of the last two PTVs, 163.37 + 116.65 = 280.02 which is only 8 units of price-time space away from a perfect 2x144 = 288.

 Sumary

 An expected bottom due to the major Gann's 84yrs cycle might be in place in July 2016. This major cycle, together with Gann's 14yrs cycle harmonics turning at the same time may have aligned with a bottom.

 Even though not as conclusive as we would like it to be, the PTV analysis indicates that it is possible a bottom is in place. July and August are very good month to expect a change in trends, particularly bottoms in the wheat market.

[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: Update: Wheat - July 2016

 Ricardo Da Costa

 Grain Market Analysis