Live cattle: 06/22/2017

2017-06-22_19-08-54

The chart above presents my phasing analysis on Live Cattle. The structure is not too clear from a longer term cyclical perspective. It seems evident that we are still due for an 18 year cycle trough that is expected to occur some time next year in my humble opinion. The recent advance seems very promising and we would have to wait for more price action in order to change the interpretation presented on this chart. I am currently looking at a 40 week cycle correction in progress that is projected to bottom in late August to early September of this year hence I am bearish on this market until then. It would depend on what occurs after such a trough to confidently conclude where this market stands from a larger cyclical perspective. I would rather not place a projection for the future course of this market considering its structural complexity. I would be looking for quite a tradable low in September of this year and until then I would not recommend any longs in this particular commodity despite its recent stellar performance.

2017-06-22_19-20-47

The chart presents the 20 week cycles in this commodity. It seems evident as stated earlier that the upcoming trough is expected early September this year. Notice how the 18 month FLD’s trough coincided with a peak in prices or was pretty close to the peak experienced recently on Live Cattle. For now I maintain a bearish stance considering that the peak of the 40 week cycle is almost certainly in on this particular commodity. As the structure clarifies on the smaller time frame we will get more clues on what to expect on the larger time frames. It is important to note that we are very close to an 18 year cycle trough that should see the prices of cattle significantly higher just like we are expecting on almost every other commodity but for now I would prefer to trade the 20 week cycles with the current favorable position being short until August to September then long for a sizable move to the upside that should last at least several weeks from the projected trough.

 

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