Wheat's overall trend, revealed by trends of price, leverage, and time, are defined and discussed in The Matrix for subscribers.
We extended the weekly database to 1959 temporarily, rather than the normal 2000 to see if today's price and time cycles are as extended as the computer says. We do not run the entire database to save computer resources and speed up the calculation of the Matrix for daily publication.
Wheat's weekly price (BuS) and time (BuST) cycles are 2.5 and 2.14. Please watch the 8/26 Grains Review for further discussion of weekly cycles and cycle extension in the grain market.
The computer analysis of the price and time cycles since 1959 are 0.6 and 2.3. The computer is saying the following: if we study weekly price from 1959, today's weekly impulse is far less extended than reported when looking at prices from 2000. BuS = 0.6 is smaller than 2.5. As expected, though, the time cycle (BuST) remained extended. BuST = 2.3 tells us today's impulse is even more extended today relative to larger database.
In other words, the expectation for consolidation going forward cannot be removed. The consolidation can be a sharp decline, grinding sideways action for weeks/months, or a running correction (see Grain Review for further discussion). I expect this analysis holds for corn and soybeans, as all three grain markets are highly correlated.
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