From the desk of Tom Bruni @BruniCharting
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Strength across the commodities complex has been a significant theme throughout 2016, but Feeder Cattle has not participated to the upside at all this year. It currently sits at near 3 year lows and is down 15% for the year, but recent price action suggests this market could be setting up for a monster squeeze to the upside.
Structurally, prices have been stuck in the 145-170 range since breaking the uptrend line from the November 2009 lows. Last week prices made new marginal lows as momentum diverged positively. If this sharp reversal back above the December lows holds until the end of the week, it would confirm that bullish divergence and failed breakdown from a structural perspective. The upside target for this potential move would be the YTD highs near 170. [Read more…]