Live Cattle (April)
April live cattle managed to stage a continuation of yesterday’s rally, but it lacked the conviction that we saw in the broader markets. We still think there is an opportunity for prices to grind higher over the next week, but bulls should temper their expectations. 123.075-123.45 is that next resistance pocket, one that we would like to sell against on the first test. This pocket represents the gap from January 24th, the 100-day moving average, a key retracement, and other previously important price points.
Resistance: 123.075-123.45***, 124.025-124.30****, 127.90-128.55***
Support: 120.20**, 118.975-119.10****, 116.70****
Feeder Cattle (March)
Cattle futures have been technically sound over the last two weeks, providing some great opportunities for buyers and sellers who have been prepared to be nimble. March feeder cattle continued their recovery today, putting the market one step closer to filling the gap left on January 27th, from 138.80-139.40. This pocket also contains the 200-day moving average, a key retracement, and several other previously important price points over the last several months. We wold be looking to the sell side here with clients who lifted hedges recently or clients who want to be short. If you bought technical support over the past few sessions, this is the spot to reduce.
Resistance: 138.80-139.25****, 140.80-141.125**
Support: 133.25-134.20****, 130.00
Lean Hogs (April)
April lean hog futures struggled to find traction, not all that surprising after yesterday’s pitiful attempt at a relief rally. We believe April hogs are cheap at these levels but know from past experiences (code for an a** kicking) that the market can remain irrational longer than we can remain solvent. The recent volatility created an irrational and emotional trade, making indicators/levels all but meaningless. The one silver lining over the last two days is that the consolidation has started to re-calibrate some of the shorter term technicals. First resistance is obvious, that comes in from 65.15-65.825, the gap from January 31st. Support is more difficult being near uncharted territory, but we see 61.00-61.775 as the obvious pocket. This pocket represents the lows from the last three sessions. The RSI (relative strength index) is at 23.77.
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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.