Soybeans/Corn/Wheat Bullish; Wheat Triggering New Multi-month/Multi-Quarter Buy Signals!
01-04-21 – Soybeans, Corn & Wheat remain bullish with Soybeans breaking out above multi-year resistance (~1200.0/S) as Corn and now Wheat follow suit. Soybeans are fulfilling a major 16-Year Cycle (as well as an intervening 8-Year Cycle) that has precisely timed major, accelerated advances since 1972/73. That was reiterated in June & July as Soybeans were preparing for a breakout higher…
On an 8-year basis, and more profoundly on a 16-year basis, Soybeans have experienced major price surges – reinforcing the cyclicality of commodities. During the previous phase of the ~8-Year Cycle, Soybeans experienced a 9-month surge from ~1100 to ~1800/S into late-2012.
If Soybeans match that advance, they would stretch this surge into Jan. ‘21 (April ‘20 + 9 months = Jan. ‘21) and possibly spike as high as ~1500.0/S (April ‘20 low of ~800 = 700.0 points = ~1500.0/S).
As Soybeans are completing a parabolic move, Wheat is validating signs of its own upside breakout… Wheat is now expected to take the lead in the next advance and to experience a proportionately-greater move to the upside (than Soybeans) throughout the first half of 2021. One of the primary reasons for this is the setup of the 21 MACs – on a monthly, weekly and now daily basis (reinforced by the corresponding monthly, weekly & daily trend signals and patterns).
This combination of 21 MAC indicators is very similar to what unfolded in Soybeans in July & Aug. and then in Bitcoin in Sept./Oct. ‘20 – ushering in the accelerated phase of its projected surge into late-2020…
In the case of Wheat, this scenario has been updated in the Weekly Re-Lay over the course of the past couple months – with a convincing buy signal triggered on Dec. 24 – 29. (That buy signal and accompanying charts are from the Dec. 29 & Dec. 30 Weekly Re-Lay Alerts.)
One of the primary indicators projecting a major uptrend was the monthly 21 MAC, illustrated on the top chart. Its action the past few years, and particularly since the beginning of 2020, has powerfully reinforced the overall outlook for a new bull market…
Since its major bottom in 2016 and its secondary bottom in 2019, Wheat has been tracing out a textbook bottoming pattern – moving in close sync with the monthly 21 MAC. It entered 2020 trading above that channel and then dipped into June 2020 – when cycles were projecting the onset of a major move up.
Simultaneously, it tested and held it’s rising monthly 21 Low MAC and quickly reversed higher. In Sept. & Oct. ’20, Wheat confirmed a breakout higher – closing above the monthly 21 High MAC and also above early-2020 highs.
That ushered in a classic 1 – 3 month reactive pullback that had Wheat drop precisely to its rising monthly 21 High MAC and reverse higher in early-Dec. That then handed the ‘baton’ – like a relay racer to the runner taking over for the next leg of a race – to the weekly charts and the weekly 21 MAC for further reinforcement and clarification…
Wheat corrected during the second half of Oct., all of Nov. and the beginning of Dec. – retracing a precise 50% of its 2020 advance while dropping toward its rising weekly 21 High MAC and bottoming during the week after it dropped to and held its weekly HLS (an extreme downside target that is usually met 1 – 2 weeks before a multi-month bottom takes hold).
[That is very similar to what Bitcoin did in Sept. ‘20 – pulling back to its rising monthly 21 High MAC while testing and holding its monthly HLS.]
It also bottomed in perfect adherence to the weekly trend pattern, dropping far enough to twice neutralize its weekly uptrend but not far enough to turn the weekly trend down. On a weekly basis, it was the ideal setup for a decisive, intermediate bottom.
As illustrated on the accompanying Weekly 21 MAC chart, Wheat quickly surged and closed the week – on Dec. 11 – above its ascending weekly 21 High MAC. During each of the subsequent weeks, it pulled back to retest this critical level of rising support… and then again surged.
The Dec. 24 close provided a confirming signal and that handed the baton to the daily chart and daily 21 MAC for final honing of this developing breakout…
That ‘baton transfer’ had already been unfolding since Dec. 11, when Wheat surged and closed above its daily 21 High MAC as that average – and channel – were flattening and preparing to turn up.
It then pulled back to its daily trend support, daily 21 Low MAC and month-opening range (589.5 – 592.5/WH) and held – reversing higher and closing back above the daily 21 High MAC on Dec. 17 as the 21 MAC was turning up – a textbook pattern.
Following that signal, Wheat repeatedly pulled back to test the rising daily 21 High MAC – each time closing above it and reinforcing that support. On Dec. 28, Wheat provided the perfect setup for a shorter-term pullback and low – dropping right to its daily HLS and holding as it retested the rising daily 21 High MAC. A final, ascending low was set and a new intermediate buy signal was triggered.
It also tested and held weekly support and its weekly 2 Close Reversal support (the weekly close of Dec. 18) – all tightly gathered at 608.25 – 609.75/WH – and held, producing the final confirming signal of developing strength and an impending surge higher. Daily cycles corroborated – projecting a low and new surge in sync with this intermediate buy signal.
Intermediate cycles show that this latest advance could extend into [reserved for subscribers]… 1 – 3 month & 3 – 6 month traders can enter long positions in July Wheat futures at 625.5 down to 606.5 & risk [reserved for subscribers]… TRADING INVOLVES SUBSTANTIAL RISK”
Grains are in the midst of the crescendo of a 40-Year Cycle of Drought & 80-Year Cycle of Agriculture (leading into 2021) – entering parabolic moves in another example of the 90/10 Rule of Cycles.
~11-Year, ~40-Year & ~80-Year Cycles converge in 2021/2022 and pinpoint what could be a seismic shift in natural, geopolitical and market cycles at the same time many food/commodity inflation cycles transition.
On a 1 – 3 year basis, Corn has a corroborating 3-year low (July 2007) – low (Jun 2010) – high (July 2013) – high (June 2016) – high (May/Jun 2019) – high (May/June 2022) Cycle Progression – projecting the next 1 – 2 year peak. Wheat has a ~6-year low (2004) – low (2010) – low (2016) – high (2022) Cycle Progression that is being reinforced by a ~33-month low (3Q 2016) – low (2Q 2019) – high (1Q 2022) Cycle Progression. Soybeans have an ~8-month Cycle Progression that portends future peaks in ~May ’21 & ~Jan ’22.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.