by Jim Wyckoff, Senior Analyst TraderPlanet.com
FEBRUARY LEAN HOGS
February hogs closed up $0.08 at $59.80. February hogs closed slightly higher on Monday as it extended last week’s narrow trading range. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are oversold and are neutral hinting that a short-term low might be near. If February renews this month’s decline, November’s low crossing at 58.15 is the next downside target. Closes above the 20-day moving average crossing at 61.20 would confirm that a short-term low has been posted. First resistance begins with the 10-day moving average crossing at 60.50 then the 20-day moving average crossing at 61.20. First support is last Monday’s low crossing at 59.20 then November’s low crossing at 58.15.
FEBRUARY PORK BELLIES
February bellies closed down $0.82 at $86.15. February bellies closed lower on Monday as it extended last week’s decline and closed below the 50% retracement level of the October-November rally crossing at 86.75. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If February extends this week’s decline, the 62% retracement level of the October-November rally crossing at 84.93 is the next downside target. Closes above the 20-day moving average crossing at 89.73 would confirm that a short-term low has been posted.
FEBRUARY LIVE CATTLE
February cattle closed down $0.95 at 94.57. February cattle gapped down and closed lower on Monday thereby renewing the decline off September’s high. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near-term. If February renews this fall’s decline, the 62% retracement level of the 2006-2007 decline crossing at 93.14 is the next downside target. Closes above the 20-day moving average crossing at 96.26 are needed to confirm that a short-term low has been posted.
MARCH FEEDER CATTLE
March feeder cattle closed down $0.80 at $105.48. March Feeder cattle closed lower on Monday as it extended last Friday’s decline. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible. If March extends today’s decline, December’s low crossing at 104.70 is the next downside target. Closes below this support level would renew the decline off November’s high while opening the door for a possible test of June’s low crossing at 103.75. Closes above the 20-day moving average crossing at 107.67 are needed to confirm that a short-term low has been posted.
