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Livestock Levels


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Live Cattle

Mondays trading action had Live Cattle test Fridays high at 116.575 and fail. The inability to move past the Friday high sent the April Live Cattle market on a grinding path lower to test the 13 (115.50) and 21 (115.175) DMAs. The April contract stopped just short of the 21 DMA with its low of 115.225 and ended the day (115.475) just below the 13 DMA. With price between support and resistance, a move above the high or below the low could setup our next move. A rally above the high (116.575), could lead to a test of resistance at 117.825 and then 119.40. A break below the low (115.225) puts 114.60 in play and then 112.65.

Feeder Cattle

April Feeder Cattle was unable to hold its rally above the Friday high (123.175), failing just below resistance at the 100 DMA (124.225) with the Monday high at 123.90. Traders werent able to pressure Feeder Cattle as it stayed near the Friday highs for the trading session and ended up at 122.475. It is sitting in the middle of the 120.30 to 125.30 support and resistance levels and it gave us its narrowest range in the past seven days. If April Feeder Cattle can breakdown below the Monday low (122.40), price may test the 120.30 support level. Resistance is at the 100 DMA (124.225) and then 125.30. The short-term moving averages are intertwining (8, 13 and 21) and separation of these averages will give us a good indication of our next possible directional move.

Lean Hogs

April Lean Hogs tested resistance at 67.90 during the early part of Mondays trading session, reaching 68.125 before trading down to the low of the day at 66.80. If Lean Hogs can trade below the Friday low at 66.575, continued selling pressure could lead to a test of support at 64.90. Resistance is at 67.90 and 68.50.

For those interested I hold a weekly livestock webinar on Friday, March 10 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.

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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