It will rocket to $100, fall to $50, and close flat on the day, at least that's what the Psychic Hotline told me. Vigorous buying of the 26 week breakout / 200 day MA cross (by trend following funds) has given prices an upward slope with a little distortion on turning days. Dollar weakness and a coming bovine protein shortage aren't hurting this rally either. The last update (alternate high prob scenario) is still what I'm watching. The turns in the forecast are the areas to watch, and if the trend in real price is now up, a forecasted low could be a good place to buy some cars. It's the turning points that are the most important. There's been a little bit of disruption a la the large amount of money that has flooded into the cattle markets recently. Forecast is for August futures, BTW.
Updated at 7/22/2009 close. There was a 4 day long divergence between the forecast and the price action of Aug LC last week. A day or two of divergence is normal around the market maxima/minima, but 4 days is a little out of character and is usually due to some shock, whether it be positive or negative. In this case it was a positive, endogenous price action shock where there was both a close above the 200 day MA, and a 26 week breakout in the same trading week. Hopefully, we're now back on track with the forecast. Once again, the forecast and current price action are both for the August LC contract. At the end of July, I'm going to roll into the October contract, and work on a price forecast specifically tailored to that contract.
Thanks for the work Circ, always interesting to read. I'm a fan of bullspreading feeder cattle in the fall and winter months. V/X looks really good to me.
Looks promising. Corn has taken such a beating that it alone might make this trade pretty lucrative, even if you don't get much appreciation from the feeder/fat portion.
Because this the cattle crush is a 3 way spread trade. TraderTX didn't ask for opinions on an outright corn trade. Not a terrible day to be biased towards corn anyhow.