Live Cattle (Cash Index): The cash market remains in a major (long-term) up as it hit a new high of $157 during January before closing at $156. Based on monthly stochastics the live cattle cash index remains sharply overbought and actually established a bearish crossover at the end of the month. This could be viewed as a signal the major trend is set to turn down.. Theoretical Positions: Traders would likely be long the market with a stop below the previous 4-month low of $143 (October 2022).
Feed Cattle (Cash Index): The case could still be made cash feeders are in a major downtrend based on the bearish 2-month reversal completed between August and September 2022. If so, then applying the Horseshoe Proximity the January spike to a new high of $183.59 before closing lower for the month could be considered a double-top pattern as well. Theoretical Positions: Short near the September close of $175.46. Additional shorts could be added near January’s close of $180.42, putting the average at $177.94. A break of the interim low of $172.03 would project a downside target of $161.02.
Lean Hogs (Cash Index): I am not getting a good read on trend from the monthly chart for the lean hog cash index. That being said, the most recent technical pattern was a bearish key reversal during August followed by a gap down to start September. Theoretical Positions: It’s possible some might’ve sold as August came to a close given the bearish key reversal pattern being completed.