February Live Cattle
The recent rebound in the live cattle market stemming from the low of 117.575 seen in early to mid December was exposed to be as unstable as it appeared. I will say that I thought price would be hard pressed to violate the inner low of 122.650 which I had previously identified as a potential wave 1 extreme. At that time I believed the rally was an non- impulsive 4th wave. I was proven incorrect as the market pressed above to post a high of 123.650 before suffering a rather rude rejection in Friday’s session. So where does that leave me know in my attempt to accurately classify the structure of the sell-off we have witnessed from highs established in early November. To me there are a couple of interpretations both suggesting further declines. It must be noted that the limit move has left the market just off the throw back support level at +/- 118.300. A moderate recovery would not be out of the question. However I believe any rebound will be snuffed out. It is my contention that we are looking at either a series of 1-2’s or perhaps an X wave high. The projection using a simple 1 x 1 measurement would come it at +/- 111.00. Timing studies call for a late January sequence completion if it is was an X wave. The implications of a 1-2,1-2 structure would suggest an even deeper selloff. My proposed scenario breaks down should price be able to fortify the 121.500 level.
My analytical breakdown focuses on a blend of wave pattern recognition, long and short term geometrical extensions and momentum signal interpretation. I welcome you to contact me at Walsh Trading to discuss my assessment of this and any other market.