December Live Cattle
The cattle market failed to commit to a discernible direction in today’s price action. Coming off the lows seen on Wednesday cattle has appeared to developed a subset impulsive reaction by completing a minor five wave structured advance which peaked out at the speed-line resistance of 117.400. Following an early high prices pulled back in an three way pattern to the .618 retracement level of 115.500 before rising slightly to finish at 116.150. In Elliott theory 5 wave sequences are impulsive in nature being categorized as an i, v, a or c wave two of which are a terminating structures. The decline off the 119.175 to me does’t seem it has retraced deep enough. This leads me to believe we have just observed a the minor a and b wave of an non-impulsive bullish correction the b wave unfolding in the move from today’s high to 115.500. I’d be looking for a c wave to play out to the upside before getting turned back. This in turn would complete the (a-b-c) b wave of a larger (a-b-c ) pattern. First upside point of contention comes in at +/-117.100 a press above should follow thru to approximately 118. This should ultimately give way to a c wave decline. My downside target zone comes in at 112.500 to 112.000.
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Please join me next Wednesday as I use the wave principle to analyze the cattle and other commodity markets.