Wheat Monthly Analysis
Tracking wheat becomes increasingly boring. It lost about 30% after our call in August 2022 and we see no reason for a change in perspective.
In this monthly analysis, we 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 2-month candles continue to point down. The October monthly candle had a chance to form a reversal combo, but failed and the odds for a continued decline are higher now. Note that the price is below the 200 monthly MA.
The weekly is tracking down after two “death” crosses. The daily moves are mere noise from the perspective of the larger frames.
All trends shows are bearish and there is no strong event or signal which would indicate a bullish reversal at the moment.
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: the wave could complete 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 technical indicators and candles signal a continued 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 already in the target area and could push lower.
Wheat is bearish on multiple frames and shows no signal for possible reversal. In order to reverse such trend, the commodity needs to confirm a bullish reversal on at least a monthly frame.
The overall odds remain bearish and the commodity has better chances to continue further down in Q4 and beyond.
I hope you enjoyed the analysis and will find it beneficial for your investment planning.
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Happy Trading!
