Lean Hog Futures—Hog futures in the December contract is trading lower for the 2nd consecutive session down another 140 points or 2.07% at 66.25 as prices are hovering right near a 3 week low. At the current time I am not involved, but it does look to me that a top has been formed as prices look expensive coupled with the fact that it looks to me that prices will fill the gap that was created on October 8th around the 64.80 level in the coming days ahead.
Hog prices are now trading below their 20 day moving average for the 1st time since August, but still above their 100 day as prices have experienced over a 40% rally from their contract low which was just hit in late July as this has experienced a tremendous rally to the upside as now I think it’s come to an end. Coronavirus spreading worldwide is to blame for much of the sell-off across the board today and if you agree with my analysis I would sell a futures contract at today’s price while placing the stop-loss above the October 19th high of 72.80 as an exit strategy as the risk would be around $2,500 per contract plus slippage & commission.
The risk on this is more than I’m willing to take at this time so I will sit on the sidelines, however I’m certainly not recommending any type of bullish position.
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