Live Cattle

Aggregation of basis remains the goal.  How remains the question to achievement.  Nothing was done yesterday to narrow it and today, even though June rallied, cash appears to have traded a dollar higher as well.  The USDA will release the cattle on feed report at 11:00am cst on Friday the 26th.  This will make for some hyper volatile trading.  Looking out into the world, nothing has changed to impact consumer spending.  Equity indices across the spectrum have set new historical highs.  Gasoline is sharply lower today in response to OPEC’s decisions, as well has remained at the lower retail level for some time now.  Employment appears to continue to climb and the weather this weekend appears good across a large portion of the north east.  That’s where the people are.

The wave count remains unchanged.  In my opinion, it appears the algo traders were out in full force Tuesday and Wednesday.  My perception is that when they came to the table this morning, there wasn’t enough volume for them to work their programs.  Hence, once they quit, prices moved higher, which is perceived the path of least resistance anyway.  The close today on October puts it to $2.05 of contract high close.  That is within striking distance for tomorrow. Since June is still spot month and active, we’ll look at it for a comment.  Intra day, June has created two peaks.  One at $126.87 and the other at $125.12.  Draw a line across the two and today’s high bumps its head on this line.  A trade above this will begin to lead me to anticipate a reversal.