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Livestock Levels


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Live Cattle

April Live Cattle broke down from Mondays low (117.575) on Tuesday, March 14, 2017. Live Cattle attempted to rally at the open reaching the high of the day at 118.00 before breaking down and testing support down at the 8 DMA (116.25). It made its early low at 116.225 and then grinded higher and tested the 117.825 resistance level making a lower high at 117.225. Aggressive selling in the last 20 minutes of trading took price to a new low for the day at 116.15. It ended the session at 116.20. The decline in price to support puts Wednesdays Fedcattleexhange auction in the spotlight. Last week futures were strong before the auction and it declined after a disappointing auction. Tomorrows auction will have 4,763 cattle for sale. A weak auction could see price break down below support and could lead to a test of trendline support at 114.70 and then the 21 (113.375) and 50 (112.375) WMAs. If the auction is strong futures could bounce off of support and retest 117.825 resistance and if trendline resistance (118.70) is taken out a test of the January 20 high (119.875) is possible, then the January high at 121.45 becomes the focal point. Continued strength could push price towards resistance at 124.675.

Feeder Cattle

April Feeder Cattle tracked Live Cattle, making its high (128.45) near the open then breaking to the downside, trading past trendline support at 127.125 to 126.475, it low for the day before recovering to 128.00. An end of the day selloff took price down to the middle of the days range. The session ended at 127.25. A breakdown from the low could see price test the 13 WMA at 125.875. Support then comes in at 125.30 and then the 100 DMA at 124.725. A rally above the Monday high could lead price to test the January high at 131.75. The next level is at 133.00.

Lean Hogs

April Lean Hogs continued to move away from resistance (70.00), trading up to 71.275. The rally stalled and ended the day with a spinning top candle formation. This indicates indecision as the high is just short of the 61.8% retracement of the decline from the June 15, 2016 high (90.425) to the October 19//2016 low (40.70). If the rally continues, a test of resistance at 72.875 is possible. A breakout from this level could send price up to resistance at 77.90. A breakdown from 70.00 (support and the session low) could see Lean Hogs test support at the 21 DMA (68.85) and then 67.90.

For those interested I hold a weekly livestock webinar on Friday, March 17 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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