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Jim Wyckoff: Lean Hogs Closed Up on Monday

11 March 2014, at 8:56am

US - April lean hogs closed up the $3.00 limit at $116.00 Monday.

Prices hit another fresh contract and all-time record high today. This market is in a parabolic stage, which suggests, from a time perspective, that a market top is close at hand. There are still very bullish cash hog market fundamentals at work, including a pig disease in the U.S. and strong consumer demand. Hog futures bulls have the solid overall near-term technical advantage. Prices are in a very steep two-month-old uptrend on the daily bar chart.

Recent price action will likely produce a blow-off spike top in the hog futures market soon. The next upside price breakout objective for the hog bulls is to push and close prices above solid chart resistance at $119.00. The next downside price breakout objective for the bears is pushing prices below solid technical support at $110.00. First resistance is seen at $117.00 and then at $118.00. First support is seen at today’s low of $115.00 and then at $114.00. Wyckoff's Market Rating: 10.0

April live cattle closed down $0.05 at $143.20 Monday. Prices closed nearer the session high in quieter trading.

The market is pausing following last week’s volatile price action. This pause is not bullish. The collapse in volatility makes me suspect a bigger move is right around the corner. Last week’s price action produced a bearish “key reversal” down on the daily bar chart.

That is an early technical clue that a market top is in place. Bulls still have the overall near-term technical advantage. Bulls’ next upside price “breakout” objective is to push and close prices above solid resistance at last week’s contract high of $146.65. The next downside technical breakout objective for the bears is pushing and closing prices below solid technical support at $141.00. First resistance is seen at $143.60 and then at $144.00. First support is seen at last week’s low of $142.80 and then at $142.00. Wyckoff's Market Rating: 6.5

May feeder cattle closed up $2.17 at $176.57 Monday. Prices soared to a new contract high to give the bulls fresh upside momentum to suggest more price gains are in the offing. The feeder bulls have the solid overall near-term technical advantage. The next upside price breakout objective for the feeder bulls is to push and close prices above solid technical resistance at $180.00. The next downside price breakout objective for the bears is to push and close prices below solid technical support at $174.00. First resistance is seen at $177.00 and then at $177.50. First support is seen at $176.00 and then at $175.40. Wyckoff's Market Rating: 8.5