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Livestock Levels


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Live Cattle

The June contract broke down yesterday (Monday, March 27, 2017) trading down and almost making new low from the March 22nd anchor candle. The anchor candle is the large bullish breakout solid green candle that price has just retraced all the way to the candle low. Todays trade took price to the candles low (111.25) a couple of times and couldnt break through. This set up a potential double bottom and a rally above the Tuesday high (112.525) could lead to a test of the March 23 high (114.20). A breakout above here could see price test the 115.05 and 116.025 resistance levels. A breakdown from the low has the 200 DMA nearby at 110.90 and then109.80 and 108.35.

Feeder Cattle

After the Monday meltdown, where the May Feeder Cattle broke through and closed below the 131.75 support level, Tuesdays trade was all about consolidation. It made multiple attempts to break out above the 131.75 level and a couple of attempts to take out Mondays low (130.85) but was unsuccessful at both (low 131.00). Tuesdays high (131.975) was much lower than the Monday high (133.575) and with todays low higher than yesterdays low the session formed an inside candle. Trading below the Tuesday low could lead to a test of support at the 200 DMA (130.225). Support then comes in at the gap area from the 3/15 low (129.10) to the 3/15 high (129.025). A breakout above todays high could test resistance at 133.00 and then134.175.

Lean Hogs

June Lean Hogs traded down to support at 72.875, making its low at 72.30. It closed below support and follow through to the downside could see price test support at 71.60 and then 70.00. A rally through the 73.75 high could lead to a test of resistance at 74.225 and then 77.90.

For those interested I hold a weekly livestock webinar on Friday, March 31 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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