Feb 06 Lean Hogs

[DaveT]

Lean Hogs look like a good set-up for a LONG position, basis Feb 06 contract. Any weakness within the next few days and I will buy.

1) Key Reversal, after support.

2) 38.2% Fibonacci retreacement (just exceeded)

3) Closed back above the trendline.

4) Oversold Stochastics and RSI based at 40 (uptrend low)


Objective 7000-7200 (basis Weekly continuous Feb 06 Chart)

 

[gene]

I'm lookin' at it a little different:

What I'm wondering about, though, is whether there will be an upward correction from the consolidation phase it's in, or will it break to the down side and continue. Either way, I'm bearish on the hogs.

edit: (I don't know why my daily chart didn't upload as a thumbnail.)

 

[JonnyT]

This one is difficult.

It could be a change of trend, conversely it could just be a pullback.

Personally I wouldn't trade it at present and would await what happens with the next swing high and swing low.

However if you 'guess' right now it could be rewarding.

JonnyT

 

[DaveT]

Thanks for the replies guys.

The SEASONAL CHART could support the bull argument from here.

After the usual October decline (peak pork production period passing), the SEASONALS turn UP from late-October through to January.

PLUS, look at the deferred months (feb, April, June). The further out you go, the stronger the charts look - implies a favourable supply/demand outlook going forward, IMO.

Don't forget the potential effects of Bird Flu - it could drive consumers away from poultry and back to meat - at a time when global demand for US Pork has been consistantly strong.

Just my opinion.

Here is the SEASONAL CHART:

 

[DaveT]

The Venerable Jake Bernstein is BULLISH HOGS (and cattle) for 2006:

Here is an excerpt from his latest Weekly NewsLetter:

"Hogs: Await a major buying opportunity by late October. The
last approximate 3-4 year cycle low was made in 2002. This
projects the next ideal low for late 2005. Commercials
continue to hold a large long position in hogs. I believe that
this market is headed much higher. I would not be surprised
to see hog prices double over the next few years."

FWIW.

 

[DaveT]

FEB HOGS UPDATE - 60-min chart showing potential DOUBLE BOTTOM.

 

[DaveT]

Update : daily Feb Hogs:

First target = Resistance 6670-6810.

 

[gene]

And now, the opposing viewpoint:
A bear flag with an outside-day down as a nice little finishing touch, followed by a downside breakout.

Hog weights are up and slaughters have been big.

However, there is a VERY bullish factor: I'll sell, tomorrow.

 

[JonnyT]

Looks a good short signal to me aswell.

JonnyT

 

[DaveT]

Seasonals , guys, seasonals!

Looking good and strong for a test of the highs soon, basis Feb Hogs.

Demand is good and prices will respond.

IMHO.

 

[gene]

I did not sell, and I 'm considering entering the long side for a day or two.

As far as seasonals: I wish there were someone here who would apply electrical shock to me every time I think about looking at the fundamentals.

 

[squaregains]

ok new to this instrument - but on CS I can see an offer of 61.25 with a min trade size of £1 - so does this mean that for each .01 tick movement my exposure is £1 ? seems to large.. thanks in advance.

 

[TWI]

That was a rather nasty move. Those hog traders are greedy spoof b*stards.

 

[TWI]

squaregains, that is ~4* cheaper than the actual contract so consider your assumption correct.