Futures Commentary and Analysis

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OK Corral: December Live Cattle
John Lunney - IF - Thu Oct 12, 3:02PM CDT
December Live Cattle

TheGunfight at the O.K. Corralwas a 30-second shootout between lawmen and members of a loosely organized group of outlaws. Well an equally brief battle between the bulls and the bears played out in the live cattle market when the selloff approached the 1st wave high of the structure at 116.325. Just past high noon the price decline accelerated violating cross zone support at +/-117.10 posting an extreme of 116.625. Then like a bullet it shoot back above the violation zone to close at 117.275. The 116.325 level of contention I spoke of has the same technical significance as the initial wave 1 high extreme of 112.725 which fought off a bearish attack early this month when the selloff held up at 112.900. This is the low from which this last structural advance commenced which I believe is the 5th wave of the sequence. At roughly 119.00 we achieved the 1 x 1 extension projection and it is currently up in the air whether or not this rally has run its course. An early clue would be to witness a violation of the subset 1st wave high. Seeing that this was momentarily avoided the door would now be open to assess today's low as subset 4th wave extreme. The market would then be expected to advance in an impulsive minor 5 wave pattern. The first level of interest lies overhead at +/-118.300. A fortification of this level would be seen as favorable. The hourly channel projection points to a follow thru to roughly 120.500 and would not be achievable during the final session of the week considering the daily limits. The 1 x 1 projection suggests a moderate new high. If on the other hand the market would turn south again violate 116.325 then a likely follow will unfold which would find near term support at +/-115.600. The most important aspect of this scenario playing out is that it would be the first structural evidence needed in assessing that this advance beginning at 106.725 has in fact terminated. I would then be suggesting that any rebound of a non-impulsive fashion to a measurable Fibonacci target be shorted. Looking forward I would target approximately 112.500 to be reached.

My analytical breakdown focuses on a blend of wave pattern recognition, long and short term geometrical extensions and momentum signal interpretation. Please feel free to contact me at Walsh Trading to discuss my technical approach. Employing my expert skill set Id be pleased to offer a free customized outlook for a product in your specific field.

John Lunney

Senior Technical Analyst

Walsh Trading

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