Live Cattle Futures—Live cattle futures in the August contract is down 80 points at 96.40 reversing the gains that we witnessed in yesterday’s trade as prices are hovering right near a 6-week low while also stuck in a 7 week consolidation pattern looking to break out to the downside in my opinion.
If you take a look at the daily chart the downtrend line remains intact as prices topped out slightly above the 100 level as I will be recommending a bearish position if prices break the 93.57 area on a closing basis while placing the stop loss above the 10-day high standing at at 98.12 as the risk would be around $1,800 per contract plus slippage & commission as the volatility has been stagnant over the last 2 months.
The commodity markets continue to head sideways as there is still so much uncertainty about the Coronavirus going forward as the risk / reward looks to be in your favor as prices look to break to the downside as we have experienced around a 25% rally from the April 6th low. Cattle prices are trading below their 20 and 100 day moving average as the trend has turned to the downside so keep a close eye on this market as we could be involved in the next couple of days.
CHART STRUCTURE: EXCELLENT
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