Live Cattle (Cash Index): The Index continued top rebound during January closing at $235.29, up $6.29 for the month. While it could still be argued the Index is technically bearish, the downtrend during October and November looks to have been manipulated and politically motivated. Fundamentally, futures spreads remain bullish through the summer 2026 contracts. Theoretical Positions: Long-term investors may have moved to the sidelines in cattle given it is a market in the crosshairs of the US president. If short positions were established near the September settlement of $240, based on what looked to be uncertainty at the time, then sell stops would be above the September high of $242.
Feeder Cattle (Nearby futures): The market still looks to be in a major downtrend given the completion of a bearish key reversal during November. If so, the ongoing rally would be considered part of a Wave B (second wave) within a 3-wave downtrend pattern (Elliott Wave). Theoretical Positions: Long-term investors likely sold the market near the November settlement based on the completed bearish key reversal.
Lean Hogs (Cash Index): The Index completed a bullish key reversal during January, confirming a move to a new major uptrend. This coincided with a bullish crossover by monthly stochastics below the oversold level of 20% meaning the market signaled a new uptrend (stochastics) and confirmed the signal (reversal pattern) at January’s close. Theoretical Positions: Long-term investors may have shorted hogs near the new 4-month low of $96.30 during October. If so, then they would buy those positions back near the January settlement of $85.72 and go long at the same price with sell stops below the January low of $80.39.
