Lean Hogs

Near Term (Basis June): Bearish

Thursday’s early try at a rally and then new low trading levels will keep the daily June lean hog futures well defined in a strengthening trend lower bias. We still have a measured swing count based on the channel breakout to the downside at 65.50 cents as a place to reach for. The open interest has started to show modest increases as a sign that the large spec trader group might now be finished with its need to liquidate a bad long position and it is instead working on building a new short. It can be a reason for the contrarian part of the market to start thinking about the next spec trap in the game…force out the Johnny-come-lately new shorts, but in our mind it is still a little premature to think about this or at least to start trading for it. Let’s get the COT data to show the large spec as a net-short, the downside objective still 2.00-3.00 cents away from here, and the ADX closer to the mid-to-high 30 readings and then it might look more appropriate to talk like a contrarian bottom-picker. 

Long Term: Bearish

Our long-term technical outlook is bearish. Major resistance is at 71.27 cents, while support is 65.87 and then 61.87 cents. 2017-04-20 16_40_49-042017_SF_Daily_Commentary_Lean    Hog [Read-Only] - Microsoft Word2017-04-20 16_40_42-042017_SF_Daily_Commentary_Lean    Hog [Read-Only] - Microsoft Word

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