Live Cattle
April Live Cattle stalled on Monday, March 20, 2017, failing to make a new high and trading down to test trendline support at 118.20, making the day’s low just above it at 118.45. Breaking down below trendline support could close the gap from the March 15 high (118.075) and the March 16 low (118.20). Support is at 117.825 and then the 13 DMA (117.00). A rally that takes price above the Friday, March 17 high (119.75) could lead to a test of resistance at the January 19th high (121.45). This could be a key battleground for the rally. A close above the January 20 high puts the May 2016 high (124.675) in focus. A failure from the January 19th high could signal a significant top and indicate a possible double top formation. More on this possibility as it evolves.
Feeder Cattle
April Feeder Cattle tested support at the 200 DMA (130.60), making its low for the day at 130.80 and then once again took off, surpassing the January 20 high (131.75) and then passing the 50 WMA (132.65) and resistance at 133.00. The rally stalled just above it at the day’s high (133.70). Price broke down from here and ended the session at 132.75, in between the 50 WMA and the 133.00 resistance level. Another rally above the 133.70 high could lead to a test of resistance at the March 2013 low (136.80). A breakdown from the Monday low (130.80), could lead to another test of the 200 DMA and then trendline support at 129.10.
Lean Hogs
April Lean Hogs traded down to support at the 50 DMA (68.375) making the day’s low at 68.30 recovered and rallied to resistance at the 8 DMA (69.375) making the day’s high at 69.275.It broke down from here and ended the session just above the low at 68.55. A breakdown below the day’s low could see price test support at 67.90. A breakdown from here could lead to a test of support at 66.625. A rally above the 8 DMA could see a test of resistance at 70.00 and then the March 14 high at 71.275.
For those interested I hold a weekly livestock webinar on Friday, March 24 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.
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
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.