Jim Cramer got crazy tonight about the crash in Pork Bellies and said Cattle was now weak. He was all dressed up as a butcher....it was hilarious. Chicken was mentioned as a low price alternative. Even on Fast Money, the lower cost of feed prices was mentioned as driving profitability in cattle raising....
What's interesting about this thread is that there are those who flood the forums claiming that T/A or Price Action is BS but you've seen us in this thread call where this market was likely to go. We had different opinions as to how and when it would happen but ultimately, we were accurate...as we used T/A to reach that conclusion.
Exports to Russia account for only 2.18% of all exports. Understanding this, it seemed like the cattle market needed some sort of an event to change the trend. The Putin sanctions appear to be that event. We've had a fairly substantial retracement at this point. The feeder cattle seem to be hanging in there better than the live cattle. The fundamentals do appear to point to a continuing lack of cattle though.
I disagree. I actually think for the first time, this market looks shortable. I don't track this market so I have no conviction on the call, but from a distance, it looks good here. If it does bounce, I would NOT short it and would change my view back to neutral.
If Live Cattle is a short at this point, I wouldn't be surprised to see it fall back to that 138-140 area.