Live Cattle Bears in Technical Command

live_cattle_nov1109.gifDecember live cattle futures on the Chicago Mercantile Exchange are presently in a technically bearish posture. Prices are trending lower from the October high of $87.90 and on Tuesday hit a fresh four-week low. Even on recent trading days when the key “outside markets” were in a bullish posture for the commodity futures markets (a weaker dollar and firmer crude oil and stock index futures prices) the cattle futures market has sagged still lower. This is yet another significantly bearish clue for the cattle market.
The next downside price objective for the powerful live cattle futures market bears is producing a close below solid technical support at the contract low of $83.50. That would produce more serious chart damage and open the door to a challenge of strong technical support at the $80.00 area.
For the beaten-down cattle market bulls to begin to regain some upside near-term technical momentum to suggest that a market low is in place, they will have to fill a downside price gap on the daily chart that was created last week. That means pushing prices above resistance at the top of the gap, located at $86.30. Stay tuned! Jim Wyckoff