Wheat: bounce and pullback out of potential 54 month trough

Wheat (Chicago) is an interesting one. Here is the long term view (click on images to enlarge):

wheatdanThis phasing places the previous 4.5 year (54 month trough) in June of 2010. There has been a bounce in late September last year which must be the most recent 54 month trough. The cycle comes in at 53 months, which makes it highly probable as the correctly phased candidate for this long term cycle.

Even longer term the previous 4.5 year cycle made a left translated high in early 2008 before falling for several years to the current status. This results in the possibility that the low in September last year was a trough of 9 year magnitude and a possible excellent opportunity to get long in this commodity over the next year or two.

A break of the 54 month downward sloping VTL would confirm the September low as a 9 year trough. Lets look more closely at the shorter cycles:

wheatdan2Price came up to the 54 month VTL and touched it before moving down towards the forthcoming 20 week low. Indeed this is the second time the VTL has provided resistance, the previous high in May 2014 was rejected at the level of the VTL. This is a great sign that this particular valid trend line has significant importance to the price movement of wheat. I expect it to be broken and move fast out from that break, to the upside, within the next 20 week cycle. I expect the low in September to hold.

wheatdan3Zooming into the most recent price action there is clear cyclic activity. The most recent 80 day low came in at the start of December 2014 at 61 days, close to the Hurst nominal model average. There has been 43 days elapsed since the low, indicating the 20 week in mid February. I will be watching this closely for an opportunity to get in. I see entry points at a crossing of the 20 day VTL (purple) or the 20 day (FLD). If this is indeed a 54 month trough we are bouncing out of price will break the high in December after exploding through the long term VTL.

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