Live Cattle
Monday’s trading action had Live Cattle test Friday’s high at 116.575 and fail. The inability to move past the Friday high sent the April Live Cattle market on a grinding path lower to test the 13 (115.50) and 21 (115.175) DMAs. The April contract stopped just short of the 21 DMA with its low of 115.225 and ended the day (115.475) just below the 13 DMA. With price between support and resistance, a move above the high or below the low could setup our next move. A rally above the high (116.575), could lead to a test of resistance at 117.825 and then 119.40. A break below the low (115.225) puts 114.60 in play and then 112.65.
Feeder Cattle
April Feeder Cattle was unable to hold its rally above the Friday high (123.175), failing just below resistance at the 100 DMA (124.225) with the Monday high at 123.90. Traders weren’t able to pressure Feeder Cattle as it stayed near the Friday highs for the trading session and ended up at 122.475. It is sitting in the middle of the 120.30 to 125.30 support and resistance levels and it gave us its narrowest range in the past seven days. If April Feeder Cattle can breakdown below the Monday low (122.40), price may test the 120.30 support level. Resistance is at the 100 DMA (124.225) and then 125.30. The short-term moving averages are intertwining (8, 13 and 21) and separation of these averages will give us a good indication of our next possible directional move.
Lean Hogs
April Lean Hogs tested resistance at 67.90 during the early part of Monday’s trading session, reaching 68.125 before trading down to the low of the day at 66.80. If Lean Hogs can trade below the Friday low at 66.575, continued selling pressure could lead to a test of support at 64.90. Resistance is at 67.90 and 68.50.
For those interested I hold a weekly livestock webinar on Friday, March 10 at 3:00pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar.
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
bdicostanzo@walshtrading.com
www.walshtrading.com
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.