December lean hog futures at the Chicago Mercantile Exchange last Friday saw a sharp gap-lower price move on the daily bar chart that produced a bearish weekly low close. Then on Monday, the bears did a curtain call and produced another sharp, gap-lower trade and close near the session low and at a fresh three-week low. The past three trading sessions have lopped off nearly 4 cents a pound from the price of December lean hog futures. Serious chart damage has occurred to strongly suggest a near-term market top is in place.
click the chart to enlarge
Recent price action on the daily bar chart for December lean hogs also shows that a bearish double-top reversal pattern has formed, from the September and November highs. The next downside price objective for the bears is to produce a close in December lean hog futures below solid chart support at 60.00 cents a pound. Below that lies strong technical support at the October low of 58.35 cents.
For the bulls to begin to regain some upside technical footing, they would have to fill on the upside Monday’s downside price gap on the daily bar chart. That means pushing prices back to 64.20 cents, basis December futures.
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