Grain's overall trend, revealed by trends of price, leverage, and time, are defined and discussed in The Matrix for subscribers.
Are the primary trends changing in the grain markets?
Have you ever seen/is it possible for the weekly BuST stay above 2 for extended periods of time with continued rally? Or is it a "must" that the cycle reset before we expect to see things really heat up in markets like the grains?
I've decided to expand this discussion for additional questions.
No. The primary trends are relatively young and stable. Monthly price (BuS) and/or time (BuST) cycles above 1 and 2 are required to destabilize the trend. Only a primary trend Flip from up to down closes the core long position in corn, beans, and wheat.
The short- and intermediate-term are faced will a rising probability that the composite trend will fall out of alignment, because the weekly price and time cycles are exceptionally high in the grain market (see composite trend below). Corn, beans, and wheat's BuS and BuST are above 2; soybeans time cycle is approaching 3. These types of cycle readings are dangerous not only for grains but also every market tracked in the Matrix.
Cycle number above 2 are rare. Cycle numbers above 3 are extremely rare. Let's be clear, rare means increasing odds that some sort of correction is coming to reset the daily and weekly trend.
Corrections can vary from sharp, elevator-shaft declines to grinding sideways action, or running corrections. What's odd is the surprising strong bullish energy build in corn and beans as the weekly time frames are pushed to the limit.
The weekly time frame is more important than the daily, but not as important as the monthly. The concept of time is just as important as price. It provides a perspective often missed by price only analysis.
Composite Trend (a function of three time frames moving together)
The computer is telling us the weekly time frame is extended relative to recent history unless it's different this time. I am considering doing a full historical run on grains to see if it alters the time cycle score. I do not expect a material change. The assumption that it's different this time has burned more figurative barns than it has constructed in the trading/investing world.
The core position is long for corn, soybeans, and wheat. This stays this way until the primary trend destabilizes or flip down. Destabilization of the primary trend takes place as price and/or time cycles climb above 0.5, 1, and eventually 2.
Primary trends are defined below
Corn Primary Trend
Soybeans Primary Trend
Wheat Primary Trend
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