Wheat is in a long-term uptrend according to Ichimoku on the daily and weekly timeframe. However, in the short/medium term the price action is forming an N wave with time cycles of approx. 77 days between major highs and 45 days between major lows.
We are currently seeing some resistance and retracement around the 800 level. I would theorise the N wave will move the price downwards to the next forecast low (11 November). We can then expect the long-term trend to resume, hitting the next high around 1 December (forecast dates are +/- 1-2 days).
This week I would currently look for a short opportunity on each retracement as wheat continues to move lower. However, due to the long-term uptrend, I will only short where there is a strong risk/reward, as ultimately I will be looking for a long position in November.
We are currently seeing some resistance and retracement around the 800 level. I would theorise the N wave will move the price downwards to the next forecast low (11 November). We can then expect the long-term trend to resume, hitting the next high around 1 December (forecast dates are +/- 1-2 days).
This week I would currently look for a short opportunity on each retracement as wheat continues to move lower. However, due to the long-term uptrend, I will only short where there is a strong risk/reward, as ultimately I will be looking for a long position in November.
Trade active:
We've had fantastic price action these past two days, with great breakouts upwards. I placed my long-term buy on yesterdays big break upwards. We've also now just passed the previous resistance from 2 November.
The time cycles are a little bit faster than I initially predicted, but they have given me the conviction to short last week and then wait and buy this week. I am looking to hold my long position for 2-3 weeks in anticipation of a retracement at the end of the month.
If you are not in the market yet, I would wait for a retracement on the 1-2 hour chart and set a buy with a narrow SL. You'll get great risk/reward.
The time cycles are a little bit faster than I initially predicted, but they have given me the conviction to short last week and then wait and buy this week. I am looking to hold my long position for 2-3 weeks in anticipation of a retracement at the end of the month.
If you are not in the market yet, I would wait for a retracement on the 1-2 hour chart and set a buy with a narrow SL. You'll get great risk/reward.
Since my original post, the price of Wheat has declined around 3% and we have moved down in several N waves. If you look at the 1hr chart, it is quite beautiful. Price has been consistently breaking down, then retracing up 50-70%, then breaking down again. I've been shorting from each 50-70% retracement.
As for where we go next: Currently, on the 2hr chart, we still see a bearish outlook with Ichimoku. Tenkan sen is below Kijun sen. Chikou is below the price. Senko span A is moving down, but Senko span B is flat.
Despite the potential bearish outlook in the short term, we are currently seeing some strength, with a double bottom around 762. This is very close to the 1 day Kijun sen (760), so it is possible to say that Kijun sen is acting as support.
I will look for another sell if the price breaks below Kijun sen/760. However, we are getting close to when we could expect this downwards retracement to end based on time cycle analysis. The time cycle forecast shows that price should bottom out by November 11 (+/- 2 days) and then move upwards again.
Trade ideas: If price keeps ranging, and starts moving up again (say, past Tenkan sen at 782) I will begin to look for a long-term buy. If price breaks Kijun sen downwards (760) I will look to sell.