FOR THURSDAY: (11/17) Usually we can count on grains going lower on Thursday but cycles are particularly volatile so we’ll leave the markets alone and count on pattern completions lower to exit the rest of hedges and to start thinking about buying March contracts. Cattle is getting ready for COF report. Hogs are topping and have to take profits on longs.
DEC. LEAN HOGS (electronic session ok)
SWING TRADING RECOMMENDATION: Hold Dec. lean hog longs from 46.275 with a 4685 stop. Exit 4880.
TODAY’S COMMENTS: (11/17) Not going to get too greedy, as this one has worked out well and we’ll be happy to get out near 4900. Hourly chart is hooking up and 4895 could come in. Upper target is 5147 and is too rich to pursue.
OVERALL: Still open to seeing 5000 but will leave it alone. Continuation chart patterns look done with a rally to 5000 and 5145 likely and eventually to 5450.
CYCLES OVERVIEW: Higher into Thursday; lower Friday.
FUNDAMENTALS: September through mid-October’s hog kill has run 4.5% over last year and pork production is up 4.1%. The September Hogs and Pigs suggested the kill during this period would run 4.1% over. So even with a hurricane-related low kill week in hand, we’re still over the level implied by the H&P report.
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