Limbo in December Live Cattle
December Live Cattle has been in a virtual free-fall since making contract highs back on September 19th. We’ve sold off nearly $7 since scoring the new high. To say it’s been a remarkable year for live cattle futures would be an understatement - we’ve made all time highs, and bucked bearish seasonal tendencies along the way. The strength observed across the cattle contracts is well substantiated by national cash-trade transactions, and cattle on feed numbers - two of the most important components of fundamental analysis in the cattle markets.
Where will we find support?
If you look at the retracement from the contract’s low to the contract’s high, we are quickly approaching the 23.6% retracement level at 183.100. This could be viewed as our first major pocket of support, as it is both a significant fibonacci retracement level, but also a point where we saw prices pace through continuously between July and September.
Trendline Support
In the case that the 23.6% retracement does not hold, another key area to consider is long-held trendline support. Now, that could be a ways away from where we’re at. If price continues to free-fall, trendline support should come into play around 181. But, if prices stabilize and begin moving sideways over the course of the coming weeks, both trendline support and the 23.6% retracement level will converge. This convergence serves a “cluster” of evidence that provides more credibility to the support pocket.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Where will we find support?
If you look at the retracement from the contract’s low to the contract’s high, we are quickly approaching the 23.6% retracement level at 183.100. This could be viewed as our first major pocket of support, as it is both a significant fibonacci retracement level, but also a point where we saw prices pace through continuously between July and September.
Trendline Support
In the case that the 23.6% retracement does not hold, another key area to consider is long-held trendline support. Now, that could be a ways away from where we’re at. If price continues to free-fall, trendline support should come into play around 181. But, if prices stabilize and begin moving sideways over the course of the coming weeks, both trendline support and the 23.6% retracement level will converge. This convergence serves a “cluster” of evidence that provides more credibility to the support pocket.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.