Live Cattle (Cash Index): The live cattle cash index remains in a major (long-term) uptrend as it posted a high of $185.50 during October and finished the month at that mark. Resistance is still at the June high of $190.00. Theoretical Positions: Traders would likely be long the market with a stop below the previous 4-month low of $177.42 (July 2023). Hedgers have likely continued to roll put options up and sell cash.
Feeder Cattle (Cash Index): The cash market dropped sharply during October, hitting a low of $236.53 before closing at $237.23. Technically, the index looks to have completed a bearish 2-month reversal indicating the major trend has turned down. This would confirm the bearish crossover by monthly stochastics above the overbought level of 80% at the end of September. Theoretical Positions: As with live cattle, hedgers have likely continued to roll put options up and sell cash. Additional sales could be made on a possible Wave B (second wave) rally within the new major 3-wave downtrend.
Lean Hogs (Cash Index): I’m not getting a good read on the major trend for the cash lean hog market. After completing a bearish 2-month reversal at the end of August, the index gapped down to start September and extended its selloff to an October low of $77.13. Theoretical Positions: None at this time.