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Livestock Levels


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The December Live Cattle futures rallied past resistance on Wednesday November 16, 2016, as the online auction helped drive prices higher. Traders reacted to strong demand from the online auction as prices rose $2-3 higher than last week. Cattle traded at $106 - $108 during the auction. This set the stage for additional purchases from $108 -$109. Cash buyers aggressive buying helped push the December futures above the 10680 - 10710 resistance area to a new high at 10835. This is the highest level since September. If the December contract can trade above 10890 (Sep High), I think we can see price trade to resistance at 111175. The next level of resistance comes in at 11545. A failure from the Thursday high could see price trade down to 10600 and then 104525.

The January Feeder Cattle stubbornly followed along and traded up to resistance at 125300, reaching 125675. If Feeder Cattle can gather strength above resistance, it has the potential to test the 128525 level and then the 133000 level. A failure from Thursdays high could lead to a test of support at 123050. Support then comes in at 120175 119950, and then 118100.

The December Lean Hogs contract has been trading in a range from 45100 to 48750. A breakout above 48750 could lead to a test of resistance at 51800 and then 54700. A breakout below 45100 could lead to a test of support at 43050 and then the 40700 low.

LC

FC

LH

HIGH

108350

125675

48275

LOW

105150

122650

46250

CLOSE

108225

125425

48050

R3

112533

129542

50825

R2

110442

127608

49550

R1

109333

126517

48800

PIVOT

107242

124583

47525

S1

106133

123492

46775

S2

104042

121558

45500

S3

102933

120467

44750

For those interested I hold a weekly livestock webinar on Friday, November 18 at 2:30pm. 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 signup.

Sign Up Now

Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

Direct: 312.957.4163

888.391.7894

Fax: 312.256.0109

bdicostanzo@walshtrading.com

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.



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About the author


Ben DiCostanzo
Senior Market Strategist
Walsh Trading

I began my career in the Securities industry working as a runner on the floor of the New York Stock Exchange while I attended Pace University. I then started working for Salomon Brothers in their Government Bond Trading arena. After graduating from Pace University with a degree in Accounting, I transferred to Chicago and became a member of the Chicago Mercantile Exchange utilizing my experience to execute trades and manage risk for institutional clients as a broker for Salomon Brothers on the trading floor. I then embarked to trade for my own account in the stock indices pits as a local before moving off the floor to aid and assist individual clients in their trading endeavors. I now work at Walsh Trading holding a series 3 broker’s license whose duties include being the firm’s Chief Market technician.

I understand that every client's needs are different, and I pride myself in tailoring my service to each client's unique circumstances and needs. Individual client experience, risk tolerance, and capital all play a role in how I approach the markets. I am involved in all markets using technical analysis to find opportunities. My approach is driven by the principles of capital preservation.

My trading philosophy is that if you can recognize and manage the risk, you have a better chance to be successful in trading. I advise clients to always use stops as money management in my opinion is the most important ingredient in trading commodities.

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