February Live Cattle
The cattle futures inched up to post a new high for week in today’s session. Topping out at 122.600 the market just failed to overlap what I am currently labeling as a 1st wave low at 122.650. The overall structure from the the early November peak appears to be missing a wave which makes me believe that we are currently witnessing a non-impulsive 4th wave advance stemming from 117.575. Elliott Wave which can be very complex in theory only has three main rules one of which states the 4th wave extreme cannot travel into the territory of the 1st. This in my opinion points to an extremely favorable risk/reward setup. Other clues to me are the visible daily channel comeback location along with the appearance of multi time-frame momentum divergence. My downside target comes in around 115.00 which is the converges point of the .786 retracement and the weekly channel. A short position with a stop placed just above the 122.650 level could produces a return of 13 to 1.
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.