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Wheat: 5-Year Seasonal Cycle Defines An Slight Upward Drift

ByEric De Groot
Published 04/20/2015, 07:14 AM
Updated 07/09/2023, 06:31 AM

The professional investors must profit by anticipating future trends and events rather than chasing old news. This is done by following the invisible hand or message of the market. That message, the simultaneous study of the the cycle of accumulation and distribution (trend), the distribution, movement, and participation of leverage (leverage), time/cycles, and human behavior void of opinions is defined below:

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Trend

Negative trend oscillators define a down impulse since the third week of January (chart 1). Wheat (Weat) has fallen from 11.58 to 10.56 since then. The bears control the trend until this impulse is reversed.

A sustained close above 13.60 jumps the creek of resistance and triggers a countertrend rally. A close below 10.81 confirms continuation of mark down.

Chart 1
WEAT And ITCO And LTCO

Leverage

The flow of leverage defined a new bull phase or negative flow of leverage since February 2012 (chart 2). A DI2 close above its December 2014 high reverses the phase. A DI2 close below its November 2012 low confirms continuation.

Wheat's bull phase, displaying a well-defined downtrend throughout, has been extremely weak.

Chart 2
Wheat And DI and DI2s

Positive leverage oscillators define an up impulse that opposes the bull phase but supports the bear trend (chart 3).

Chart 3
Wheat And ITCO and LTCO

Time/Cycle

The 5-year seasonal cycle defines an slight upward drift until the fifth week of April (chart 4). After that, the seasonal cycle defines weakness until the early July transition. Time, the driver of price and leverage, advises caution for the bulls.

Chart 4
5 Year Seasonal Chart For Wheat

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