Wheat Monthly Analysis
Wheat lost over 26% after our call 13 months ago and provided no reason for altering our long term forecast. This call is added to our Track Record and we will discuss the probabilities for the next move (public post).
In this monthly analysis, we will traditionally evaluate the candles that ZW1 formed on multiple frames, deep dive into technical analysis and statistics, and share the next forecast using the Elliott and Fibonacci theories.
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MONTHLY ANALYSIS
TA: MACD
The MACD analysis and estimates remain intact, as initially projected in August 2022.
The monthly MACD cross happened on August 2, 2022. The event of such magnitude previously happened in the middle of 2008. After the event in 2008, wheat took 24 months to reach the bottom! The peak to trough loss was 68%.
As the technical combo of indicators on this and a few other frames are very similar, we estimated a possible decline. The current wave could continue down towards $440 and terminate in the middle of 2024.
CANDLES
The overall candle map continues to be bearish and a few recent combos are worth noting.
The 2-month frame is dealing with the Three Black Crows, closed in August with a bearish candle and flipped the 8 and 20 EMA lines in a bearish cross.
The commodity closed the month with a very strong bearish Engulfing candle and pushed the price below 200 MMA.
The weekly is in a free fall. Note a looming 50/200 WMA “death” cross. The daily is bearish, signaling a continued ride southbound. All short and long term trends shown are bearish.
CLASSICAL PATTERN – Double Top
In the middle of August 2023 wheat completed a Double Top pattern and it allowed us to share this projection.
So far, the commodity is on track for the first target and already lost over 5% after the call.
ELLIOTT WAVES
The initial projection made in August 2022 remains intact.
Several signals support the hypothesis about the current wave that it is likely wave C of the huge correction that started in 2008.
We have at least two large Fib scales to measure the target for this wave:
1. For regular flats, the length of wave C is normally 0.786-1.0 of wave A: $437-635 (already reached the minimum level).
2. Motive wave C of the current structure would typically terminate in the $427-530 area.
Timing perspective: geometrically (and ideally, though it is rarely the case), this wave could end in July 2024.
Multiple estimates by different techniques point to approximately the same area:
Target by flag: $375-500
Target by MACD: $440
Target by candles: $300-450
SUMMARY:
Wheat signals a bear market for 2023 – 2024 and, possibly, longer.
As posted in August 2022: “The commodity is estimated to complete this correction in the $427-$635 range.”
Wheat is bearish on multiple accounts and shows no signal for possible reversal. In order to reverse such trend, the commodity needs to develop a bullish reversal on at least a monthly frame.
The overall odds remain bearish and the commodity has better chances to continue further down.
I hope you enjoyed the analysis and will find it beneficial for your investment planning.
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