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Live Cattle (December)
December live cattle managed to grind higher yet again, defying gravity and posting their highest close since April 29th. We’ve seen the market rally for seven consecutive weeks as managed money continues to pile in. Friday’s Commitment of Traders report showed funds added 9,672 contracts, extending their position to 31,214 contracts. Volume was light in today’s trade, the RSI reading 75 may make it tough to encourage new buyers to step in right here, right now. With that said, the grind higher has been impressively constructive and similarly to finding a bottom, the bears need to see some sort of capitulation, in this case a blow-off top. There is some resistance from 117.85-118.25, above that is contract highs all the way up at 124.00-124.175. On the flip side, first support comes in from 114.25-114.925.
Resistance: 117.85-118.25**, 124.00-124.175****
Support: 114.25-114.925***, 111.20-112.10***, 109.00-109.50***
Feeder Cattle (January)
Note that the Volume has moved to the January contract. Feeder cattle were under pressure briefly but manage to finish the day closer to unchanged in what was a relatively uneventful inside day, trading within the previous day’s range. Resistance comes in from 142.225-143.00. This pocket represents the recent highs but also the top end of the range from July. The RSI (relative strength index) is at 62, not “overbought” but still relatively high.
Resistance: 142.225-143.00****, 145.65-146.15**, 147.65-147.975***
Support: 138.65-139.00****, 136.10-136.25***
Lean Hogs (December)
December lean hogs have been trying to form a near term bottom towards the low end of a month and a half range, we defined that last week as 65-72 (for round number purposes). The bull camp MUST defend support, a failure, break, and close below could take us to fill the gap from September 11th, that comes in at 61.525.
Resistance: 69.30-70-15***, 73.975-74.25***, 77.80**
Support: 64.15-65.00***, 63.075**
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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.