Cattle futures were able to post gains again in yesterday’s trade as the double bottom remains intact (for now). These are the levels to keep an eye on in today’s trade.
Live Cattle (December)
Since Monday’s Bullish reversal we’ve moved our short-term bias back into bullish territory for the first time in what seems like a lifetime. Yesterday’s price action was encouraging but the Bulls still have their work cut out for them to confirm a double bottom is indeed in place. The big hurdle on the upside comes in from 179.10-179.97. If the Bulls can chew through this pocket, we believe that could accelerate the buying momentum back into the mid-180s. On the support side of things, the Bulls want to defend our pivot pocket from 175.72-176.10. A break and close back below there would likely neutralize our newly found optimism. The bullish thesis would be counter seasonal to what we typically see in the back half of September.
Resistance:179.10-179.97, 181.325-182.07
Pivot: 175.72-176.10
Support: 173.17-173.87, 172.25
Feeder Cattle (October)
October feeder cattle have a similar setup to live cattle as they too are attempting to carve out a double bottom against the August 21st low. The big technical hurdle for the Bulls to get out above comes in from 239.62-240.15. The next resistance pocket above there comes in from 242.75-243.45. Above that and there’s a lot of air on the chart for the market to move higher. As with live cattle, this would be counter seasonal and with the ranges in feeder cattle being so wide, our convictions are a little reserved. Position sizing is key in this market.
Resistance: 239.62-240.15, 242.75-243.45
Pivot: 236.20-236.75
Support: 232.75-233.95, 229.35-229.85
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