Consensus National Futures and Financial On Line Index
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HALCO TRADING STRATEGIES
MARCH SOYBEANS: In the last 44 years since 1953, 12 years have exceeded the November highs in the month of December, 21 years have dropped below the November lows and 11 have remained inside the range of November, meaning they were neither higher nor lower than the month of November.
Higher December–12 Years
Penetration Of The November High (749½)
1. Of the 12 years that were higher in December, 11 of 12 had also exceeded the October highs by the end of November. Therefore, in the years where December has been higher than November, 92% of those same years had also exceeded the October highs in November as we did this year.
2. 67% exceeded the November highs by December 6th. 75% exceeded the November high by 12/10.
3. 75% of the years that exceeded the November highs moved higher for 6 or more weeks to make the primary cycle crest. The minimum move was 4% above the November high in 10 of 12 years. A 4% move would signal a minimum profit objective of 29 cents above the November high entry point. The average advance for all years was 15% i.e., a penetration of November's highs at 749½, would signal a possible advance to 779 or higher for the primary cycle crest.
4. 90 % of the higher Decembers exceeded their previous primary cycle highs.
5. 100% of the higher December years continued their advance higher into January. 67% continued to advance into February or early March.
So, if last month's high (749½) is exceeded in December,--Expect prices to have a minimum objective of 779-862 and a move up into at least January with a probable move into February-March.
Lower December–21 Years
Penetration Of The November Lows: (706½)
1. Since 1953, there have been 21 years that have penetrated the November lows in December. 18 of 21 years, or 86%, had done this by December 12th.
2. When the November low has dropped below the low of October, there is a 77% probability of December being lower than or inside to November's range and only a 23% probability of exceeding the highs of November during December.
3. All entries occurred as the primary cycle was moving down and, 15 of 21 made their primary cycle bottom within four weeks of the day the November low was taken out.
4. The median move to the primary cycle low was 3.9% (679). Eighty six percent of the lower Decembers moved down no more than 7.9% (651) to the primary cycle low.
5. 9 of the 15 years took out the previous primary cycle low while 6 of 15 made a low above the previous primary cycle low.
Summary
27 of 33 years (81%) that exceeded the November highs or lows, did so by December 12th. Normally, December is more likely to be a down month than an up month and usually has a tendency to penetrate November lows. by approximately 29 cents but not more than 55 cents. Because in this year the November low was penetrated on 1213–expect bottom of primary cycle to occur within four weeks and decline to 679 but not lower than 651 no later than 1st half January. Following this low, in years like our current year when the November high for March beans was above the October high–prices continued to rise into the January/February period.
Note
73% of all higher Decembers exceeded the November high by December 10th. Therefore, failure to penetrate November's highs at 749½ by 12/10 will turn 749½ into resistance for December and could offer selling opportunity. A lower December is likely to bottom within four weeks of the day the November low is penetrated.
MARCH WHEAT: 38 years have been evaluated from 1959 through 1997. 14 years went below the November low in December, 20 went higher than the November high in December and 5-year's price action stayed inside the range of November in December.
Penetration Of The November High (379½)
In December–20 Years
1. 16 of the 20 years (80%) that exceeded the November highs, did so by December 12. Ten topped in December, 6 topped in January, two topped in February, one in March and one in April.
2. 15 of the 20 occurred as the primary cycle was moving up to the crest. The median move from the November high to the primary cycle high was 4.6% or 397 in the March contract. 15 of 20 (75%)went up less than 6.6% or 404½.
3. 14 out of 20 years in which the primary cycle was moving up topped no later than the end of January.
4. 65% of the years exceeded the previous primary cycle high as the primary cycle topped.
Penetration Of The November Low (349½)
In December –14 years
1. All lower Decembers occurred as the primary cycle was moving down to a primary cycle low.
2. 12 out of 14 penetrated the November low by December 16.
3. 7 of the 14 years had made primary cycle low within five weeks of the day the November lows were penetrated.
4. The average move from the November low to the primary cycle low was 5.3%. Seventy percent of the years that dropped below the November low did not exceed an 8.4% decline. A 5.3% drop below the November low of 349½ equates to 331 and an 8.4% drop would equal 320.
5. A seasonal aspect of wheat is that in a declining market, with a lower December, the average 14- week primary cycle normally extends, bottoming 19-27 weeks from the previous primary cycle low.
Summary
Of the 34 years that either penetrated the November high or low in the month of December, 28 of 34 years did so by the 16th of December. So our expectation is that prices should either make a penetration of the November high or low by 12/16, or remain an inside month. A penetration of the November high (at 379½) will indicate a minimum rise to 397 to 404. Penetration of 349½ would indicate that the primary cycle is yet to bottom and prices are likely to reach 331 but remain above 320.
MARCH CORN: Of the 38 years evaluated between 1959-1997. Ten years have exceeded the November highs in December while 17 years have exceeded the November lows in December. In 12 years the December range was inside the November range.
Penetration Of The November Highs (299)
In December–10 Years
1. 8 of 10 years exceeded the November highs by December 8. Nine of 10 years exceeded the November high by December 11.
2. 9 of 10 occurred as the primary cycle was moving up to the primary cycle high. Five topped within two weeks following the day the November highs were exceeded. The other five years advanced for at least five weeks before cycle high was reached.
3. All 10 occurred with the seasonal cycle moving up.
4. Average advance was 6% above the November high. A 6% advance above the November high at 299 in the March contract would give an objective of 317.
Penetration Of The November Lows (279)
In December–17 years
1. Of the 17 years, 15 took out the November lows by December 12.
2. All 17 occurred as the primary cycle was moving down to make a primary cycle low.
3. Only 3 bottomed in December. The other 14 bottomed in January through March.
4. 11 of 17 took out the previous primary cycle low. Of the 6 that did not, the retracement to the primary cycle trough was 42-93%.
5. 80% of the years dropped a minimum of 2% but not more than 9.7% indicating prices are likely to reach 273½ but remain above 252. The average move of all 17 years was 6%. Measured from our November low of 279 this would equate to 262.
Summary
Of the 27 years which had penetrated either the high or low of November, 22 or 81% took out the November high or low by December 8 and 85% took out the November high or low by December 12. A lower December, like this year, indicates that prices are likely to bottom January through March between 273½ and 252 with an average decline of all years of 262. The most probable time would be 1st half January as the primary cycle bottoms no later than January 16.
December 15, 1997Halco Trading Strategies
P.O. Box 795429, Dallas, Texas 75379
Consensus National Futures and Financial On Line Index
Hosted by:
One Crossroads Place
610 West Maple Ave, Suite WWW
Independence, MO 64050
(816) 252-4080
sysop@kcmo.com
