Soybeans/Corn Plunge into July ’22 Cycle Lows; Set Stage for New Advances.
Outlook 2022/2023 – Mid-Year Review II
07-28-22 – The current time frame – from mid-June stock index cycle lows until ~mid-Sept ‘22 cycle highs (in stocks, metals, and other markets) – remains a pivotal time, not only on an intra-year basis but also on an intra-decade basis. To reiterate from last issue:
“In order to prepare for the second half of 2022 and all of 2023, it is crucial to review what was anticipated for this time period – and the months or years leading up to it – as well as what has transpired in the first six months of 2022.”
There are many reasons for that, not the least of which is that late-2021 through early-2022 was forecast to time seismic shifts in many markets, in geopolitics (including War Cycles that had been forecast for late-2021 into late-2025), in food & energy markets, in currency markets, and in society and the economy.
In Nov ‘21, three primary stock indexes fulfilled major, multi-year upside price and wave (‘5’) targets and paved the way for a projected 6 – 12 month and possibly 1 – 2 year equity decline.
On the geopolitical landscape, Russia began to mount troops on Ukraine’s border in Nov ‘21 as the long-forecast 80-Year Cycle of War began to take hold (late-2021 – late-2025).
Gold & Silver had already signaled multi-month lows in late-Sept ’21 and were projected to surge into late-Feb/early-Mar ‘22.
Even a key market like Wheat was projecting an accelerated advance in 1Q ‘22, forecast to go parabolic into an early-March ‘22 peak.
The stage was set… Nov ’21 – March ’22 was the time for the proverbial ’first shoe’ to drop.
The Paradox
There were many technical and cyclical reasons why early-Jan ‘22 was projected to time a divergent peak in equities (with only a few stocks reaching new highs while most peaked at lower levels) followed by a multi-month sell-off.
There was also a unique fundamental anamoly that necessitated it – the disappearance of millions of 55+-year olds from the labor force that were relying on their stock investments to permit them to retire early.
That was described in the Nov ‘21 issue of INSIIDE Track, at the same time multiple stock indexes were portending final spike highs (identified as likely 5th of 5th wave peaks) during Nov ‘21 and major sell-offs to follow. This outlook was a small part of a larger discussion, focusing on the impending and unfolding (potential) threat to some cities in the years to come…
The Plunge
Everything appeared to be setting up for a pair of peaks – in early-Nov ‘21 & early-Jan ‘22 – followed by a significant sell-off in equity markets. That is what has unfolded – fulfilling what is likely the first phase of a larger, overall decline (into/through 2023)…
And then there are all the ramifications of that pesky inflation that keep plaguing the markets… and now real estate. Lack of affordability combined with escalating interest rates are making many cities unaffordable and the statistics are bearing that out.
After dismissing and minimizing the threats of inflation in 2020 and 2021, the Fed is now scrambling to catch up and ‘right their wrongs’. And as is usually the case, that will cause the pendulum to impulsively and reactively swing too far in the opposite direction.
There are, however, other complications on the 1 – 3 year time horizon. Some of them are linked to the ~10-Year Cycle of Inflation reiterated in a recent Weekly Re-Lay Alert (see pgs 4/5). Combined with escalating geopolitical tensions and the long-term outlook for a Dollar peak in 2023, another round of serious inflation could be just a couple years away…
Soybeans, Corn & Wheat sold off into late-July and right to year-opening range support (maintaining their intra-year uptrends) – initially fulfilling analysis for sharp declines into – and a multi-month bottom in late-July/early-Aug ’22 – the fulfillment of ~1-year, ~2-year & ~4-year (midpoint) cycles. Corn & Wheat attacked their multi-month downside targets while Soybeans remained a little above their support. This could be the bottoming phase before another bull market…
Cotton plunged to major support (and its primary downside objective at 80 – 85.00/CT) after fulfilling multiple objectives and cycles while rallying into and topping on May 4. At that peak, Cotton matched the magnitude of its 2020 & 2021 advances, fulfilling almost all upside targets and placing it at the most likely point for a multi-month peak to take hold.
Corroborating that conclusion, Cotton repeatedly attacked and held a multi-year upside range-trading target at ~140.00/CT. Timing was also primed for a major peak.
On a longer-term basis, Cotton rallied for a little more than two years since perpetuating a consistent ~4-year cycle that timed lows in 2004, 2008, 2012, 2016 & 2020 with 2 – 3 year advances following each one of them. That is part of what had previously projected a multi-year rally into 2022.
In Dec ‘21, Cotton completed a wave ‘4’ pullback and entered a perceived wave ‘5’ advance – reinforcing all these other indicators while (also) signaling that a multi-month top could be soon to follow… after a final rally. That was when focus turned to that multi-year upside range-trading target at ~140.00/CT.
Now that it has subsequently spiked below 85.00/CT and fulfilled its primary multi-month downside target, Cotton is likely to enter a multi-month period of consolidation with a rebound back to ~107.00/CTZ likely.
Coffee spiked to new lows, fulfilling and resetting its weekly downtrend. In the process, it dropped right to its weekly HLS (~194/KCU) and held – ushering in a new multi-week low…
On a broader basis, Coffee has seen multi-year surges that roughly parallel the ~11.2-Year Solar/Sunspot Cycle. That has resulted in major surges in 1975 – 1977, 1985 – 1986, 1996 – 1998 and late-2008 – 2011 – leading to the current period. Coffee has already seen a major surge from 2020 – 2022…”
Wheat peaked in perfect sync with cycles in early-March ’22 as Corn & Soybeans extended their rallies into May ’22. That was forecast to spur a sharp sell-off into July ’22, which has been fulfilled – setting the stage for 6 – 12 month (or longer) lows in those grains.
~11-Year, ~40-Year & ~80-Year Cycles collide in 2022 (including a 40-Year Cycle of Drought & 80-Year Cycle of Agriculture) and pinpoint what could/should be a seismic shift in natural (climate, precipitation, etc.), geopolitical and market cycles at the same time food/commodity inflation cycles & Food Crisis Cycles culminate.
2022/2023 is expected to produce major disruptions including climate shifts (Drought/Deluge Cycles) and solar storms.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.