Chart of the Day: Hog futures stay in bearish market
The lean hog futures contract in Chicago has been in a bear market for more than a year and downside momentum is still strong and volume above average. More importantly, prices are back in the middle of a broad range that dominated for 15 years from 1996. The aberration is therefore the massive short squeeze up to the record high in June 2014 at 133.6 US cents per pound. Dipping below trend line support this month, price action is testament to the efficiency of pig farmers. Assuming we hold below 70 US cents per pound until year-end, chances are we will drop towards secular support between 40 and 45 US cents.
Nicole Elliott is a technical analyst