Live Cattle (Cash Index): It’s a tough call on the monthly chart for the live cattle cash index. August saw a second consecutive month of a standoff, closing at $179.00. Given monthly stochastics have completed a bearish crossover above the overbought level of 100%, the logical next move would be to the downside. However, as Newsom’s Rule #4A tells us: A market that can’t go down won’t go down. Theoretical Positions: Traders would likely be long the market with a stop below the previous 4-month low of $170.00 (May 2023). Hedgers have likely continued to roll put options up and sell cash.
Feeder Cattle (Cash Index): The cash market extended its major uptrend to a high of $249.15 during August. is the market sharply overbought? Yes, with monthly stochastics holding near 100%. But this hasn’t slowed the market down as Newsom’s Market Rule #4A (A market that can’t go down won’t go down) continues to play out. Theoretical Positions: Traders are likely still long the market. As with live cattle, hedgers have likely continued to roll put options up and sell cash when the time comes.
Lean Hogs (Cash Index): It’s possible the cash index completed a bearish 2-month reversal during August, but given the major trend had turned up with a bullish 4-month reversal this past May last month’s selloff could be nothing more than Wave 2 within the 5-wave uptrend pattern. Theoretical Positions: Traders might’ve gone long the market near $80.02 on the move to a new 4-month high, or at the May settlement of $80.08.
