Live Cattle (Cash Index): The live cattle cash index confirmed a major (long-term) downtrend after posting a new 4-month low below $181 during September. This confirmed the double-top pattern at $190. However, the index is showing a high of $190.05 for October. For now I’m going to apply the Horseshoe Proximity and say it was close enough to equaling the previous high, leaving a possible major downtrend in place. Theoretical Positions: Hedgers likely rolled put options up during the previous major uptrend and sold cash as needed. Cash cattle could continue to be sold.
Feeder Cattle (Cash Index): The index looks to be moving toward a major downtrend. The previous 4-month low is now the September mark of $239.53. Theoretical Positions: As with live cattle, hedgers have likely continued to roll put options up and sell cash.
Lean Hogs (Cash Index): I’m still not seeing anything concrete with the lean hog cash index other than an extended series of lower highs and lower lows. By definition this is a downtrend. Theoretical Positions: Cash hogs could continued to be sold.
