Cattle Futures—Cattle futures in the June contract settled sharply higher this Monday afternoon in Chicago up 187 points at 124.42 or 1.53% hitting a fresh 1 year high continuing its bullish momentum as this is one of the strongest trends to the upside out of all sectors.
If you have been following my previous blogs you understand that I continue to believe that prices will crack the 130 level in the coming days ahead as I see no reason to be short and if you are long a futures contract continue to place the stop loss at 118.57 as an exit strategy, however the chart structure will improve on a daily basis there for the monetary risk will also be reduced. Volatility is starting to expand to the upside so make sure that you are placing the proper amount of contracts while maintaining a proper 2% risk management rule on any given trade as I think this trend has legs to run to the upside.
At the current time cattle is trading far above their 20 and 100 day moving average telling you the trend is higher and as I have stated previously I think the spread between hog is finally starting to catch up as the livestock sector is experiencing a long-term secular bullish trend in my opinion.
The next major level of resistance stands at the 127 area and if that is broken prices could be off to the races as you should be looking at adding more contracts on any type of price weakness therefor the risk / reward would be lowered as well.
CHART STRUCTURE: IMPROVING
If you are looking to contact Michael Seery (CTA—COMMODITY TRADING ADVISOR) at 1-630-408-3325 I will be more than happy to help you with your trading or visit www.seeryfutures.com
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