Live Cattle
April Live Cattle opened higher on Thursday, March 9, 2017 making a new high for the week at 117.30. It opened up above the 50 DMA (116.20) and raced to the high. The market couldn’t sustain the early rally towards resistance at 117.825 failing again as sellers took control and it spent the remainder of the day grinding lower. It ended the session just above the 8 (116.25) and 50 DMAs as the 8 has crossed above the longer term moving average. This could potentially be a bullish sign if the futures contract can reverse course on Friday and rally. This would create separation and provide support going forward. The 13 DMA (116.025) is also rising up to the 50 DMA and a cross above the 50 would give a potential buy signal. However, it wouldn’t take too much selling pressure to take price below the moving averages and the April contract did close weak as it ended the session at 116.30, right near its low (116.20). A breakdown below the 13 DMA could send price down to test trendline support at 115.45 and then the 21 DMA at 115.15. A break below the 21 DMA puts 114.60 in play and then 112.65. A reversal from today’s low could lead to another test of resistance at 117.825 and then 119.40.
Feeder Cattle
April Feeder Cattle opened higher and after one attempt to trade down (low – 123.425) to yesterday’s settlement (122.775), it never looked back. It rallied to resistance at the 100 DMA (124.425), making its high just above it at 124.75. It ended the session at 124.45, just above the 100 DMA. A new high tomorrow could lead price to the next level of resistance at125.30 .A breakout above here could see price test trendline resistance at 126.45. If April Feeder Cattle can breakdown from the 100 DMA, a test of the intertwining 8(123.05), 13 (123.425) and 21 (123.30) moving averages is possible. They are close together and separation of these averages will give us a good indication of our next possible directional move.
Lean Hogs
April Lean Hogs opened on its highs as it tested resistance at the 21 DMA (69.075), reaching 68.975 before failing and trading down to support at 67.90 during the early part of Wednesday’s trading session. It made its low at 67.55 before stalling and meandering around the 67.90 level for the rest of the session. Resistance is at the 21 DMA (69.075) and 70.00. Support is at 67.90 and 66.575.
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.