May 052017
 

OMG! The most insane action I’ll probably ever see!  After 4 or so Limit Up’s hit we now see 2 Limit Downs  following the Thursday open which was an instant gap to limit up, CRAZY!!  I watched the price action on my ladder all morning on Thursday and man was it interesting to watch the big dogs slowly chop away at the limit orders that were stacked on the top. After a few thousand contracts were filled there was finally a relief and then the stops just flowed and you could watch them taking their profits as the top blew off, thus being a “blow off” top. A lot of times the following day will be a doji and them a quick double top before a larger move down but the selling just kept up with all longs liquidating. It’s impressive to watch.

On the chart we can see the gap fill following the contract roll which was a $14 difference then the bog pop. Gap up a to limit up is ridiculous and I don’t think I’ll ever see anything like it again. 

And now we see the lock limit down and none of the longs can get out and are trapped.

We could see another big day on Monday cause there could be another considerable gap but a lot of times you’ll see the limit orders are set to “day” meaning they will cancel at the end of the session so right at the close you will sometimes see thousands of contracts “pull” (removed). Going from Wed to Thursday I don’t believe think they pulled a lot of them or they were set to “Good Till Cancel”.

Well it sure is crazy!!  What an experience.

May 022017
 

Lots of bearish talk on cattle over the last few weeks but when you think about the backwardation and where the cash price trading then the technical studies of being over bought go out the window. On this chart we can see the difference in the contracts and when the April contract ended/rolled into the June it was so under priced that they shot the gap. Unbelievable! Biggest gap fill EVER! But why wouldn’t it?

Well,   you live, you learn…

Bottom line I think is to be aware of the entire market and take commentary lightly. We now seem to be chasing the cash price…

I think the ppl talking bearish on Cattle were actually long. 😉

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