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Livestock Levels


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Live Cattle

April Live Cattle gap opened higher on Thursday March 16, 2017 and except for one minor attempt to close the gap (during the first hour of trading) never looked back. It took out trendline resistance (118.70) and the March 1st high at 118.95, making a new high for the move at 119.50. Live Cattle has the January 20 high (119.875) in its sights and the January 19th high (121.45) is a key battleground for the rally. A close above the January 20 high puts the May 2016 high (124.675) in focus. A failure from the January 19th high could signal a significant top and indicate a possible double top formation. More on this possibility as it evolves. If traders want to lighten up some long positions in front of the weekend, a possible attempt to close todays gap could occur. Yesterdays high is 118.075 and todays low is 118.20. A tiny gap, but a gap just the same. Support could be found here and also just above at the trendline at 118.70.

Feeder Cattle

April Feeder Cattle also gap opened higher from yesterdays high (gap - 129.025 to 129.10). It never looked back and rallied to just above the 200 DMA (130.75), to the days high at 130.925. Feeder Cattle couldnt close above the 200 DMA as it drifted lower at the end of the day; ending the day at 130.525.A break above the 200 DMA could lead to a test of the January high at 131.75. The next resistance level is at 133.00. A Friday selloff could lead to a test of the gap and then 127.575.

Lean Hogs

April Lean Hogs couldnt keep up with the Cattle markets. It made an early attempt at a rally, bouncing off its early low at 69.85 to its high for the day at 70.775. The rally stalled and Lean Hogs traded down to its low at69.375. Price rebounded from here, making a lower high at 70.425 and then grinding lower to end the session below the 70.00 support level at 69.85. Support is nearby at the 8 DMA (69.30) and then the 21DMA at 68.825. If the market bounces off support a test of the March 14 high (71.275) is possible. The next level for possible resistance is at 72.875. A breakout from this level could send price up to resistance at 77.90. A breakdown from the 21 DMA could see price test support at 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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