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Livestock Levels


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Live Cattle

April Live Cattle opened higher on Thursday, March 9, 2017 making a new high for the week at 117.30. It opened up above the 50 DMA (116.20) and raced to the high. The market couldnt sustain the early rally towards resistance at 117.825 failing again as sellers took control and it spent the remainder of the day grinding lower. It ended the session just above the 8 (116.25) and 50 DMAs as the 8 has crossed above the longer term moving average. This could potentially be a bullish sign if the futures contract can reverse course on Friday and rally. This would create separation and provide support going forward. The 13 DMA (116.025) is also rising up to the 50 DMA and a cross above the 50 would give a potential buy signal. However, it wouldnt take too much selling pressure to take price below the moving averages and the April contract did close weak as it ended the session at 116.30, right near its low (116.20). A breakdown below the 13 DMA could send price down to test trendline support at 115.45 and then the 21 DMA at 115.15. A break below the 21 DMA puts 114.60 in play and then 112.65. A reversal from todays low could lead to another test of resistance at 117.825 and then 119.40.

Feeder Cattle

April Feeder Cattle opened higher and after one attempt to trade down (low 123.425) to yesterdays settlement (122.775), it never looked back. It rallied to resistance at the 100 DMA (124.425), making its high just above it at 124.75. It ended the session at 124.45, just above the 100 DMA. A new high tomorrow could lead price to the next level of resistance at125.30 .A breakout above here could see price test trendline resistance at 126.45. If April Feeder Cattle can breakdown from the 100 DMA, a test of the intertwining 8(123.05), 13 (123.425) and 21 (123.30) moving averages is possible. They are close together and separation of these averages will give us a good indication of our next possible directional move.

Lean Hogs

April Lean Hogs opened on its highs as it tested resistance at the 21 DMA (69.075), reaching 68.975 before failing and trading down to support at 67.90 during the early part of Wednesdays trading session. It made its low at 67.55 before stalling and meandering around the 67.90 level for the rest of the session. Resistance is at the 21 DMA (69.075) and 70.00. Support is at 67.90 and 66.575.

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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