Correction For April Live Cattle Futures?
Technical Outlook:
Live Cattle futures have enjoyed a tremendous rally over the last 3 weeks - up nearly $10 since just the beginning of February. But is the rally showing fatigue? Prices are beginning to stall out near the 61.8% retracement of the all-time-highs in October to the lows in late December. Moreover, momentum signatures are slowing - showing considerable bearish divergence on the standard 14-day RSI in conjunction with a declining volume profile. All of these factors are evidence that all of the bulls are already in the market. In other words, long liquidation and profit capture could send the April Live Cattle contract lower pretty rapidly. Outside markets, like the stock indexes, will likely play a factor in how a correction will play out. On Tuesday, we saw live cattle prices gap lower at the open after the major stock indices sold-off amidst a hotter-than-expected CPI number. Further weakness in equities will paint a dreary outlook for beef demand, and add additional price pressure on the live cattle contracts.
Check out CME Group real-time data plans available on TradingView here: www.tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Live Cattle futures have enjoyed a tremendous rally over the last 3 weeks - up nearly $10 since just the beginning of February. But is the rally showing fatigue? Prices are beginning to stall out near the 61.8% retracement of the all-time-highs in October to the lows in late December. Moreover, momentum signatures are slowing - showing considerable bearish divergence on the standard 14-day RSI in conjunction with a declining volume profile. All of these factors are evidence that all of the bulls are already in the market. In other words, long liquidation and profit capture could send the April Live Cattle contract lower pretty rapidly. Outside markets, like the stock indexes, will likely play a factor in how a correction will play out. On Tuesday, we saw live cattle prices gap lower at the open after the major stock indices sold-off amidst a hotter-than-expected CPI number. Further weakness in equities will paint a dreary outlook for beef demand, and add additional price pressure on the live cattle contracts.
Check out CME Group real-time data plans available on TradingView here: www.tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.