Shootin' the Bull about definitive price action.

“Shootin’ The Bull”

End of Day Market Recap

by Christopher Swift

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10/9/2024

Live Cattle:​

Price action today is weighted as definitive.  Fats posted an outside reversal and dark shadow on the candlestick charts.  The initial decline from today's high is not a clear cut 5 wave down.  However, a misinterpretation of it suggesting a lower move would be a critical mistake.  Therefore, I take it as is and continue to believe that futures traders have marched December up $14.60 from 9/9 and provided producers with an even, to just barely negative basis.  Less than 4 weeks ago, the positive basis was over $10.00.  So, pat the futures trader on the back, thank him/her for providing you with an even basis and lock it in.  Chris Robinson, on RFD-TV this morning, made a great point, and similar to mine, "we can't predict price, but we can protect it".  On my short commercial I stated, "risk is inherent in commodity production, it can't be eliminated, but can be managed."  Think about this for a moment. When you need help, call us.  There is no change in the recommendation to own the at the money put options in the contract month you will market in.  This is a sales solicitation.  

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Feeder Cattle:​

I think a definitive trade in feeders was made as well today.  They too produced an outside day, but the candlestick chart shows an engulfing pattern, where the open and close of today are outside of Tuesday's open and close. As well, I can count a 5 wave move down from today's high to today's low. The correction of has been choppy within the day.  For the time being I am going to draw a line in the sand with aspects of above $250.80 November, I will admit that I don't understand the cattle feeders agenda.  A trade under $247.80 November will suggest a wave 1 or A, and 2 or B complete with a wave 3 or C decline anticipated.  Producers have been fortunate to have been able to apply hedges while prices were rising. With expectations of a softening market, it will be more costly, potentially more volatility, and accepting a lower price if going to wait to see what happens next.  I know many are fixated on picking the top or bottom.  I recommend you stop, and manage your risk or protect the price. This is a sales solicitation. 

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​Hogs:

​Futures were lower with the index down $.04 at $84.22.  Basis diverged considerably today. 

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Corn:  

Barring the far back months of corn, grains and oilseeds were higher.  Wheat is believed in a wave 3 rally with corn and beans creating a sideways trading range.  This range is believed going to allow for time to transpire until the US crop is in the bin and SA in the ground. Brazil is expanding cereal grain ethanol production that is expected to chew into approximately 10% of their second corn crop.  This won't hurt corn demand. 

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Energy:

Energy has seen both sides of unchanged today.  The sharp increase in volatility leads me to expect more of the same, if not even more so.  Gasoline stocks are at a years low and there is not going to be any change in energy policy that would help to offset further advances.  If anything, I would look for this administration to buy foreign oil before ever opening a well or attempting to increase refining capacity.  Nonetheless, I gave up on being bearish as the market did finally subside and trade lower, but aspects of a weakening economy or consumer, versus bombs being dropped and a potential escalation with US involvement, is seemingly bullish.  I recommend buying diesel fuel call options or crude oil call options in an attempt to thwart any further higher price action.  This is a sales solicitation.  If you are a heavy user of fuel, call me and we'll discuss a strategy for your operation.  ​​​

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Bonds:

​Repeat from Tuesday because it is what I believe.  Bonds continue to push lower.  Inflation continues and is believed causing significant financial hardships on more consumers every day.  With a belief that either candidate will inflate the US again, this may have well been just a minor correction on a long road to higher rates.  ​​​​​​​​

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This is intended to be or is in the nature of a solicitation. An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of the margin deposits.  You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.