Harmonic Timing of Soybeans

The Centre for the Study of Recurring Cycles

PO Box 4620 Laguna Beach, CA 92652 Tel: 949-464-1051 Fax: 949-464-1081
Internet: www.HarmonicTiming.com Email: office@HarmonicTiming.com Editor: Ernie P. Quigley

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FEBRUARY 23, 2015 VOL. 23 NO. 2 *12 MONTHLY ISSUES PLUS SPECIAL REPORTS & VIDEOS

Beware the Ides of March!

Time is the most important consideration in the analysis of stocks and commodities. When time has
expired, the markets will change trend. W.D. Gann
A Preview:
Chart 1 updates the familiar 48 to 50 Week Cycle measured from February 1, 1918. I am as impressed
as anyone on the accuracy and reliability of this cycle over ninety-seven years.
The cycle aligned with the then historic high of July 3, 2008; the high of June 11, 2009; and the multiweek high of April 2012. The 48 to 50-Week Cycle aligned with the lows of July 2007; the beginning
of the bull market in May 2010; the low of April 2013; and the acceleration higher of March 2014. I
think we can agree that this cycle can align with important highs and lows.

Chart 1 An Approximate 48 to 50 Week Interval of Ganns 84-Year Cycle

2015 HARMONIC TIMING. Investing and Futures trading offers substantial risk & involves the potential of losses in excess of

your original trading capital. It should be attempted by those in the proper financial condition & who are willing to assume
responsibility for the risk involved. Past & simulated performance are not indicative of future results. This journal may
contain inadvertent typographical errors, for which we apologize. The factual information of this journal has been obtained
from sources believed to be reliable, but is not guaranteed as to accuracy & completeness.

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Table 1 Cycle Forensics of the 48 to 50 Week Interval of Ganns 84-Year Cycle

Measured from February 1, 1918 the 48 to 50 Week Cycle has a Cycle Turn Window projected for
early March 2015. The table of Cycle Forensics of the highs and lows shown on Table 1 projects a
Cycle Turn Window from February 23rd through March 10th . There are some indications this Cycle
Turn Window may be extended to later in March, thus the admonition to Beware the Ides of March.
The average rally from past lows is $2.68 +/-. If the rally from July 13, 2007 to July 26, 2007 was an
anomaly, the average of the other rallies is $1.50 +/-.
The 48 to 50-Week Cycle indicates March should see a very important turning point.
Chart 2 updates an elliptical cycle originally presented in Harmonic Timings 2015 Forecast
Presentation. The cycle can align with important lows such as July 2010, May 2012, and April 2013.
It can align with topping patterns such as July 2009 and April 2014.
Measured from August 16, 2007 this cycle has a Cycle Turning Window projected for February 22,
2015. The table of Cycle Forensics of the highs and lows of the elliptical cycle shown on Table 2
projects a Cycle Turn Window from February 17th through February 26th .
As I write this, it is difficult to determine the polarity of this cycle. 8-Week Momentum is firmly
bullish and not overbought. This suggests the elliptical cycle can be a low or an acceleration higher.
A Review:
Chart 3 on page 4 updates the 9 to 12 Month Cycle shown in the January newsletter. The Cycle
Forensics shown on Table 1 of the January newsletter showed a Cycle Turn Window from January
27th to February 22nd. Ranging from $0.44 to $4.06 , the average rally from past lows of this cycle
is $2.17 Weekly Momentum Measurements indicate this cycle aligned with the low of January 30th
and turned up.

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Chart 2 An Elliptical Cycle in Soybeans

Table 2 Cycle Forensics of Cycle 18004

Momentum Measurements
Momentum measurements are useful when they are overextended; either overbought or oversold, and
then trigger reversal patterns followed by confirmations. When 8-Week Momentum triggers a reversal
and this reversal is confirmed during a Cycle Turn Window, it is used to confirm that a cyclical high
or low is unfolding or has been made.
Chart 4 shows 8-Week and 13-Week Momentum Measurements of July soybeans.
8-Week Momentum is firmly bullish and not overbought. 8-Week Momentum traced out a bullish
reversal during the Cycle Turn Window of the 9 to 12 Month Interval of the 20-Year Cycle that

Harmonic Timing of Soybeans Page 4

extended from January 27 through February 22, 2015. 8-Week Momentum indicates this cycle
bottomed and turned up on January 30th . 8-Week Momentum indicates soybeans are rallying from
their Winter Low to their Spring High.

Chart 3 A Review: The 9 to 12 Month Interval of Ganns 20-Year Cycle - HITO

Chart 4 Weekly Momentum of July Soybeans

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Chart 5 MACD Momentum of July Soybeans

Chart 5 shows MACD Momentum of July soybeans. MACD Momentum triggered a bullish crossover
the first week of February and is bullish. This bullish crossover confirmed the cycle bottom of the 9 to
12 Month Cycle. 8-Week Momentum and MACD Momentum are bullish indicating that a multi-week
rally to the Spring High is unfolding.

Chart 6 Daily Momentum of July Soybeans

Harmonic Timing of Soybeans Page 6

Chart 6 shows 8-Day Momentum of July soybeans. 8-Day Momentum is bearish mid-way in its
oscillator range. It is not oversold. 8-Day Momentum indicates that a pause in the advance can
continue into the end of the month.
Elliptical Containment Structures in Cash Soybeans
Chart 7 updates the elliptical containment structure in Cash Soybeans at Central Illinois that has been
shown in prior newsletters. One can readily see that the perimeters of the ellipses, the inner circles,
and the 45-degree divisions of the ellipses have been meaningful containment.
The Twice-Weekly Updates have discussed the fact that Cash Soybeans moved beyond the elliptical
containment structure and were anticipated to decline to the circumference of the outer circle of the
ellipse.
Chart 7 shows this pattern has unfolded. Cash Soybeans turned up from the circumference of the outer
circle on February 2nd and have been rising. The circumference of the circle will be support on
weakness.
The use of the ellipse in the analysis of soybeans and corn is unique to Harmonic Timing. Elliptical
containment structures are useful tools.

Chart 7 An Elliptical Containment Structure in Cash Soybeans at Central Illinois

The Winter Low & Spring High
Chart 8 shows that the Fall-Harvest Low in Cash Soybeans at Central Illinois was made on October 3rd
at $8.82 . The Winter High was made on December 9th at $10.41. After the Winter High, Cash
Soybeans traced out a sideways pattern from mid-November through January 13th .

Harmonic Timing of Soybeans Page 7

The Winter Low was made on February 2nd at $9.46. The Winter Low in July soybeans was made
January 30th at $9.67. From these lows of January 30th and February 2nd prices are rallying toward their
Spring High.
Table 3 shows that since 1970, the average rally from the Winter low to the Spring High is
approximately 21% and takes 68 calendar days. While not shown on Table 3, since the historic low of
2001 the average rally from the Winter Low to the Spring High is also approximately 21%.

Chart 8 The Pattern of the Four Seasons

I took a look at five prior bear markets to see what the rallies from the Winter Lows to the Spring
Highs looked like. Here is what I found for July soybeans:
March 3, 1975 to March 31, 1975
Nov. 22 1985 to Dec. 27, 1985
Feb. 2, 1990 to May 4, 1990
Dec. 17, 1999 to May 5, 2000
Dec. 2, 2005 to Jan. 1, 2006

21.0%
15.8%
16.2%
25.3%
15.1%

These five prior rallies from the Winter Lows to the Spring Highs averaged 21.1% ranging from
15.1% to 25.3%. I was surprised to find that the average rally during bear market years was the same
as the average rally of the 44 years from 1970 through 2014.

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Table 3 Historical Data of the Rallies from the Winter Lows to the Spring Highs

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Daily Pattern of July Soybeans
Chart 9 shows the daily pattern of July soybeans from the low of October 1, 2014 ($9.35 ) through
Friday, February 20th . The initial rally from the low of October 1st completed in five swings on
November 12th at $10.97. This was a rally of $1.61 or 17.3%. (Note that $1.6175 is the Golden
Ratio of 1.618.) The high of November 12, 2014 may be labeled as a Swing (A) high of an ABC
pattern.

Chart 9 The Daily Pattern of July Soybeans

From the high of November 12th , July soybeans declined to a low on January 30th at $9.67. This was a
decline of $1.30 or 11.9%. The low of January 30th may be labeled as a Swing (B) low of an ABC
pattern.
If an ABC corrective decline is unfolding, prices are rallying to a Swing (C) high.
On Friday, February 20th July soybeans were at the Ratio Resistance at $10.23 +/-. Above this level is
the 0.618 retracement of the decline from January 12th at $10.37 +/-. If these levels are exceeded the
odds favor $10.67 to $10.70 +/- are probable targets.
Convincing closes above the high of Thursday, February 19th at $10.24 will be a sign the rally is in
the position to resume.
The Commitment of Traders Report
Chart 10 shows the Commitment of Traders data reported on Friday, February 20th as of February 17th .
There is little changed in the position of the Commercial-Hedgers during the past month.

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The net position of the Commercial-Hedgers (shown by the red line in the lower panel) is long futures
and options. This is NOT their normal business practice.
At Harmonic Timing we use a three-step program to enter into long position trades. When the
Commercial-Hedgers go against their normal business practice of hedging their inventory and develop
net long positions (as they currently are), it is an Alert that a multi-week to a multi-month rally is in
the position to develop. The Commercials can be net long for a SHORT PERIOD OF TIME as in late
2011, or for a LONGER PERIOD OF TIME as during the first half of 2010 and the current time. In
2005-06 the Commercial-Hedgers were net long from the week of September 9, 2005 through the
week of October 27, 2006, a total of 13 months and two weeks.

Chart 10 The Commitment of Traders Data

Currently, the Commercial-Hedgers continue to have a net long position in soybeans. The Large
Speculators have a small net short position. This indicates that once the Commercial-Hedgers revert to
their usual business practice of hedging their inventory there should be ample buying power by the
Large Speculators to fuel a bullish rally.
When the Commercial-Hedgers revert to their normal business practice of hedging their inventory it is
a Set-Up to stalk Action Triggers to enter into the market. Cyclical and technical tools are used as
Action Triggers to enter into long position trades.
Currently, the Commercial-Hedgers remain in our Alert status. If past history can be used as a guide,
it will take at least several weeks of rising prices for the Commercials to develop a net short position
and trigger a Set-Up to stalk Action Triggers.

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The Thirty Calendar Year Cycle in Soybeans
W.D. Ganns 30-Year Cycle measurements are a favorite of mine due to their accuracy and
reliability. Ganns cycle is actually 29.5 years and not 30 years. Nevertheless, the thirty calendar year
cycle can be useful.
Chart 11 shows the pattern of July soybeans thirty years ago (1985) and several years before and after
1985.
The high of September 16, 1983 corresponds to the high of July 9, 2013. The high of May 25,1984
corresponds to the high of May 22, 2014. The low of September 21, 1984 corresponds to the low of
October 1, 2014.
The thirty calendar year cycle suggests 2015 should have comparisons to 1985. This indicates 2015 is
a bear market year. The thirty calendar year cycle confirms there is potential for the Spring High to be
the high for the year.

Chart 11 The Thirty Calendar Year Cycle in July Soybeans

The Accumulation-Distribution Index and the Weekly Trend
Chart 12 shows the price pattern of July soybeans. The bottom window shows Williams
Accumulation-Distribution Index (ADI) and its moving average.
When the ADI is above its moving average, the trend of soybeans is positive. When the ADI is below
its moving average, the trend is negative.

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The data shows the ADI rallied above its moving average during the latter part of October 2014. The
Index never developed a good distance above its moving average but managed to stay above it until
very late December 2014. During this time period from October through December, prices chopped
sideways. Prices did not develop bullish or bearish follow-through.
In early January 2015 the ADI closed convincingly below its moving average indicating the weekly
trend had turned negative. Even with the strength since January 30th , the ADI remains well below its
moving average.
The current pattern of the ADI and its moving average indicates the rally from the Winter Low to the
Spring High will be subdued.

Chart 12 July Soybeans and Williams Accumulation-Distribution Index

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