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, a pattern that has since grown to a quadruple-top (double double-top?). November saw the index post a high of $190 before settling at $189.20. I’m starting to lean toward applying Newsom’s Market Rule #4A: A market that can’t go down won’t go down. We’ll see what happens during December. Theoretical Positions: Hedgers have likely been rolling put options up during the major uptrend and sold cash as needed. Cash cattle could continue to be sold.
Feeder Cattle (Cash Index): I’m going to call the major trend sideways for now, between its high of $261.53 (July 2024) and lows of $239.17 (February 2024), $239.45 (May 2024), and $239.53 (September 2024). As with live cattle, Newsom’s Market Rule 4A could be applied: A market that can’t go down won’t go down. Theoretical Positions: 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.
