Weakening price structure in feeder cattle monthlyExpect price pullback over the next year+ timeframe.
GFQ2022 trade ideas
More Leg to Breakdown?Feeder Cattle
Technicals (August - Q)
August feeder cattle futures posted their second consecutive inside day (trading within the previous day's range). Despite the consolidation in the last two sessions, the RSI remains in oversold territory with a reading of 26.12, the lowest since last November, which was right before the last dip lower before posting a low on December 7th. The lowest RSI during that time frame was 24.68. Is the RSI a good enough reason to be Bullish from these levels, short answer is no. With that said, we continue to believe we could see some relief from these levels that may setup for another opportunity to the sell side for those with a bearish bias or for those that need to hedge. The CME CVOL index, a measure of volatility, is at its highest levels since the Spring, it would be nice to see that subside which could help options become a little less expensive. The chart below includes a set of Fibonacci retracements from this year's range. Not illustrated is a Fib retracement from the recent selloff, the halfway back point on that would come in near 249.15.
Resistance: 245.925-246.675***, 249.15-250.92****
Pivot: 244.275
Support:240.775-240.925****, 237.80-237.97** 229.50****
Check out CME Group real-time data plans available on TradingView here: www.tradingview.com
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 www.tradingview.com
*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.
Feeder Cattle To 257.500Once again,
Feeder Cattle to 257.500. All these commodities will be highly valued or at least valued higher than now by the end of year
November Feeder Cattle Finds SupportAfter being subjected to selling pressure for the majority of the week, the November feeder cattle contract found support at the 23.6% retracement level between the contract’s low, and the contract’s high. The low for the day was only a few ticks off of the actual 253.825 level, coming in at 254.050.
There’s no question about it - feeder cattle futures have outperformed over the course of the last calendar year, but it’s well substantiated when considering the market’s fundamentals. However, the question we’re looking to answer is whether or not Thursday’s move higher is sustainable. So, let’s take a deeper dive.
Corn prices and feeder cattle prices typically do not move in the same direction. Over the course of the last 8 trading sessions, a new trendline in December corn has emerged - showing corn push toward the upper-boundary of the 20 cent trading range it’s been stuck in over the last 5-weeks.
Friday's "Triple-Witching" Event
Friday represents a “triple-witching” event in which we have a (1) USDA Grain Stocks report (2) end of a fiscal quarter (3) end of the month. Per the latest CFTC Commitments of Traders report, managed money funds have amassed more than 319k short-positions in corn futures. Thus, any fund rebalancing will likely materialize in a short-covering rally.
Now technically speaking, if the 23.6% retracement is tested, it’s statistically probable that the 38.2% retracement is tested as well. If a short-covering rally materializes in the corn contracts tomorrow, it could put significant pressure on the November Feeder cattle contract, and lead to long-liquidation within feeder cattle futures. The chart below shows managed funds’ positions in feeder cattle futures, which unsurprisingly hold a significant net-long position of 102,372 contracts. Broken down, that is 119,259 long positions compared to a meager 16,887 short positions.
Check out CME Group real-time data plans available on TradingView here: www.tradingview.com
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 www.tradingview.com
*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.
Long August Feeder Cattle: GFQ2023Seasonally supported for Buys May/June >> into July. Typical seasonal Low mid-late June (agreement across 5yr, 15yr, 40yr data).
I like how this has retraced down to old Aug'15 high and rejected that dynamically (see the GF1! W graphic). I very much like the perfectly 'clean' equal highs from 2015-2023 (see GF1! weekly graphic).
I prefer not to see price return back below the island reversal gap; though stop is set a wee bit deeper still just in case.
Looking to hold this until completion or stop out. But if we make some progress up and we get into Mid-July =>> i may consider exiting early.
3 Inflation Scenarios for 2023There are only 3 inflation scenarios that will happen till the end of 2023:
i. Improve CPI to 2%
ii. Range CPI to hover between the band of 5-8%
iii. Continue to trend higher breaking above 9%
Many investors believe scenario (i) & (iii) will be unlikely.
70% of the investors feel that CPI should settle unchanged from how the year started at between 5%-8%.
Therefore, what is moving up then? Both the long-term and short-term? I have explained in the above video.
Feeder Cattle Futures
Minimum price fluctuation:
0.00025 per pound = $12.50
TAS: Zero or +/- 4 ticks in the minimum tick increment of the outright
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
• Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
CME Real-time Market Data help identify trading set-ups in real-time 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 www.tradingview.com
GF1! (BUY)It's break two range channels. The first channels was large and the price break it. The second channel may be considered like as an pull back.
Are Feeder Cattle Setting Up for a Bigger Directional Move?Feeder Cattle
Technicals (August): Feeder cattle made an attempt to breakout yesterday but fell flat, despite the bloodbath in the grain complex. As mentioned in recent reports, the inability to take out recent highs with the collapse in grains should be a caution flag for the Bulls. That’s not to say we can’t rally from here, but the recent price action has been dismal. Perhaps feeders were pricing in a breakdown in corn prices for a while now, that’s the first thought that comes to mind. Nonetheless, the market is consolidating and looks ready for a bigger directional move once support or resistance gives way.
Resistance: 175.35-175.65****, 176.80-177.075***
Pivot: 171.45 -172.40
Support: 169.40**, 167.325**
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.
Feeder Cattle Rally on Weaker Corn MarketsFeeder Cattle
Technicals (August): Feeder cattle were able to catch a rally yesterday, thanks in part to the corn market collapsing following a “neutral” USDA report. Though it was nice to see a rally, the recent price action relative to the sharp decline in corn has been less than impressive. Not that it has to be a 1:1 correlation, but we would have expected to be a little closer to the 180 neighborhoods. Stiff resistance comes in from 175.35-175.65. This pocket represents the 100 and 200 day moving average, along with what was previously (recently) trendline support. A conviction close above this pocket may be what the Bulls need to work back towards the upper end of the recent range.
Resistance: 175.35-175.65****, 176.80-177.075***
Pivot: 171.45 -172.40
Support: 169.40**, 167.325**
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.
Feeder Cattle Threaten a Technical Breakdown Feeder Cattle
Technicals (August): August feeder cattle futures broke below trendline support yesterday, which took prices into our 4-star support pocket, 171.45-172.40. All else held equal, this is a MUST HOLD pocket for the Bulls, a break and close below could open the door for a drop into the mid-160’s. We say “all else held equal” because tomorrow’s USDA report may have a big impact on price action that could negate short term technical.
Resistance: 175.50-176.125**, 176.80-177.075***
Pivot: 173.75-174.02
Support: 171.45 -172.40****, 169.40**, 167.325**
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.
Feeder Cattle Futures Are Coiling Feeder Cattle
Technicals (August): August feeder cattle were technically sound yesterday, trading nearly perfectly against our technical support and resistance pockets, only to finish the session near our pivot pocket. Those technical pockets remain in play today as the market continues to coil, marking higher lows and lower highs. This type of consolidation typically leads to a bigger directional move. Trendline resistance, the 100 and 200 day moving average are the big barrier on the resistance side of things, that pocket comes in from 175.50-176.125. On the support side, it’s trendline support from the May 20th lows.
Resistance: 175.50-176.125**, 176.80-177.075***
Pivot: 173.75-174.02
Support: 171.45 -172.40****, 169.40**, 167.325**
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.
Can Feeder Cattle Rebound with Lower Corn Prices?
Feeder Cattle
Technicals (August): Feeder cattle futures failed against our resistance pocket from 175.50-176.125 which put them in reverse. August feeders filled the illusive gap, which was a gap lower on June 13th but a gap higher on June 21st. Yesterday’s failure to get out above technical resistance was somewhat of a caution flag as it did mark lower highs, but no significant damage was done to the chart. Trendline support and the 50-day moving average remain intact, that comes in from 171.45 (50 dma)- 172.40 (trendline support from the May 23rd lows.
Resistance: 175.50-176.125**, 176.80-177.075***
Pivot: 173.75-174.02
Support: 171.45 -172.40****, 169.40**, 167.325**
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.
Feeders Find Strength Feeder Cattle
Technicals (August): Feeder cattle gaped higher which was to be expected with the weaker grain trade. That gap is largely intact with today’s trade, except now it will act as support and not resistance. With that said, the fell flat against our resistant pocket above the old gap, we’ve had that defined as 175.50-176.125. This pocket represents previously important price points, along with the 100 and 200 day moving average. If corn futures are able to stabilize for the rest of the week as we head into options expiration, we could see the market consolidate back towards trendline support and the 50-day moving average.
Resistance: 175.50-176.125**, 176.80-177.075***
Pivot: 173.75-174.02
Support: 170.975 -171.65****, 169.40**, 167.325**
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.
A Tailwind for Feeder CattleFeeder Cattle
Commitments of Traders Update: Friday’s CoT report showed Managed Money were net buyers of 1,354 futures/options through June 14th. This shrinks their net short position to 3,553. Broken down that is 10,436 longs VS 13,989 shorts.
Technicals (August): August feeder cattle futures were able to defend trend line support on Friday, the third time in five sessions that it was tested and held. That comes in at 171.65 today. On the resistance side of things, the gap from June 13th was partially filled last week, but remains open up to 174.025. Grain markets are sharply lower this morning which may act as a headwind for feeder cattle on the open.
Resistance: 173.75-174.02***, 175.50-176.125**, 176.80-177.075***
Support: 170.975 -171.65****, 169.40**, 167.325**
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.
Feeder Cattle Test Trendline Support. Will it Continue to Hold?Feeder Cattle
Technicals (August): August feeder cattle bulled back to trendline support (see chart below), which was defended into the close. Futures finished the session right near the 50-day moving average, 171.00. Grains were firm yesterday which may have added a headwind to feeders. Grains are firm again this morning which may keep that headwind in place on the open. If the Bulls cannot defend support, a drop back to Monday's low, 169.40, wouldn't be out of the question. On the resistance side of things, the gap from Monday is still intact, though partially filled on Wednesday, 173.75-174.025.
Resistance: 173.75-174.025***, 176.45-177.075***, 178.225**, 181.65-182.10****
Support: 170.55 -171.00****, 169.40**, 167.325**
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.
Daily Feeder Cattle Technical Update (6.16.22)Feeder Cattle
Technicals (August): August feeder cattle were firm today, despite the strength in the corn market. A lot of today’s action in commodities was likely on the back of the outside markets showing signs of stabilization. Feeders traded up into our resistance pocket, 173.85-174.02 but couldn’t get much more going, keeping that pocket intact for tomorrow’s session. On the support side of things, 170.975-171.40 is the pocket the Bulls need to defend. This pocket represents previously important price points, trendline support from the May 23rd lows, and the 50-day moving average.
Resistance: 173.75-174.02***, 176.45-177.075***, 178.225**, 181.65-182.10****
Support: 170.975 -171.40****, 169.40**, 167.325**
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.
Daily Feeder Cattle Technical Update (6.12.22)
Feeder Cattle
Technicals (August): As with live cattle, feeder cattle were choppy, trading on both sides of unchanged only to finish the session near unchanged. There is a gap left from the Monday morning open, that comes in from 173.75-174.025. We would not be surprised to see this gap get filled, especially if the corn market cannot find its footing. Above that is the 100-day moving average at 176.45. On the support side of things, 170.25-170.725 is the pocket for the Bulls to defend. This represents trendline support from the May 23rd lows as well ass the 50 day moving average.
Resistance: 173.75-174.02***, 176.45-177.075***, 178.225**, 181.65-182.10****
Pivot: 171.40-171.925
Support: 170.30 -170.725****, 169.40**, 167.325**
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.
Feeder Cattle Need to Defend Support to Keep Momentum
Feeder Cattle
Commitments of Traders Update: Friday’s CoT report showed Managed Money were net buyers of 3,798 futures/options contracts, through June 7th. This shrinks their net short position to 5,472. Broken down, that is 10,900 longs VS 16,372 shorts.
Technicals (August): August feeder cattle retreated on Friday after failing against technical resistance, which we had outlined in previous reports as 176.75-177.075. This pocket represents previously important price points and the 100-day moving average. If the Bulls can eventually chew through this pocket, it would open the door for a potential run back near 182. On the support side of things, our first pocket from 174.00-174.30 remains intact after holding on Friday’s pullback. If that pocket gives way, we could retrace to last week’s breakout point and the 50-day moving average, 171.50-171.925.
Resistance: 176.75-177.075***, 178.225**, 181.65-182.10****
Support: 174.00-174.30***, 172.90**, 171.50-171.925****
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.
Daily Feeder Cattle Technical Update (6.8.22)Feeder Cattle
Technicals (August): Feeder cattle were able to rally yesterday, despite the strength we saw in the corn market. This is a silver lining for the Bull camp. Trendline resistance from the February highs has been stout, that comes in near 174. IF the Bulls can chew through this level, we could see a run at the 100-day moving average. Grain markets are firm in the early morning trade, this may act as a headwind on the open.
Resistance: 174.00-174.30***, 176.75-177.075***
Pivot: 171.50-171.75
Support: 170.225**, 165.70-166.15**, 162.80-163.30***
GF1! Live Cattle Futures Hey this one already started to take off yesterday, if you can get a price around 158.200 look for an entry, <158 stop out. Momentum might change though at open stay updated.
Seasonal Cattle Spread Worked Out Great +$4000 PotentialBoy I must admit, I sure do miss dealing with these spread markets. Far less time effort and less stressful then intraday trading outrights, that is for sure.
Shout out to @NorthStarDayTrading for the awesome Auto Support Resistance Indicator. I love it!
Feeder Cattle Continuous of Bull Run I suspect Feeder Cattle will clear the resistance and go for a run towards the highs. People will always need to eat, trillions of dollars printed in the last year and weakening supply will likely make it happen.
