Live Cattle
June Live cattle made its low (108.67) for the down move on Wednesday, April 5, 2017 trading to the 50% retracement level (108.775) of the rally from the October 13 low (96.10) to the January 19 high (121.45). Thursday and Friday saw price recover from support as Live Cattle rallied past the 38% retracement level (111.76) to 112.70. Bulls couldn’t hold this level as late Friday selling took price down to the 38% retracement level as it settled at 111.80. The 38% retracement level will be the pivot for Monday’s trading session in my opinion. A rally above here could take price up to the Friday high and then the March 23 high at 114.20. If price fails from the 38% retracement level, price could test support at the 200 DMA (110.80) and the make its way back to test the 50% retracement level.
Feeder Cattle
May Feeder Cattle broke out above the March 20 high (133.975) on Friday, April 7, 2017. It traded to 134.525 before settling (133.875) below the March 20 high. The 133.975 will be the pivot for the May Feeder Cattle on Monday. A breakout above 133.975 could lead to attest of the gap from the 3/24 high (135.225) to the 3/23 low (135.275) on the switch from the April contract to the May contract (May volume higher). Then the 61.8% retracement level (136.48) of the downmove from the August 9 high (149.975) to the October 13 low (114.65) comes into play. A failure from 133.975 could see the May contract test support at the 13 DMA (132.725) then the 21 DMA (131.625).
Lean Hogs
June Lean Hogs has been consolidating around the 72.875 price level. Thursday’s trade saw a bullish candle develop above the 72.875 level but bulls couldn’t take control on Friday. Price consolidated and formed an inside candle setting up the high and low as our pivots. A breakout above the Friday high (73.45) could lead to follow through to the upside with a test of resistance at 74.60 and then 75.325. A breakdown form the low (72.325) could see price test support at 71.275 and then the 50 DMA at 70.475.
For those interested I hold a weekly livestock webinar on Wednesday, April 12 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.