Cattle Coming Together!

I love it when a plan comes together!

Our live cattle have been facilitating that plan since we projected a low near 208. The actual low came in at 209.50, and since then, we've been discussing a larger three-wave recovery rally into the end of the year.

We've been telling our subscribers and those on trial about this outlook. By the way, you can get a free trial of our service to follow along. Just click that link!

The first leg up was Wave A. Let's measure that for you with an actual line.

When you take the measurement from that line and add it to the B wave, it gives us an objective of 227.50. That also matches a 38% retracement at 227.61 from the high we saw back in May to the actual low.

That gave us a double hit, suggesting we would encounter some resistance in this area. However, we stated that as long as we continued to see positive momentum off our moving average, we expected more upside, with a target of 231 to 233.

Now, how did we come up with that?

Besides the fact that it's a 50% retracement, if you take the move we just measured, all you Fibonacci people out there know that the second leg up, your C wave, is typically 1.382 times the first leg.

And what does that number actually come to?

Pull out your calculator, and you'll find it's 233!

Again, a double hit. That's how we use measured move theory alongside moving averages.

And how about seasonals?

We expect this rally to carry into that range sometime by the end of October or early November, when we anticipate a seasonal stall.

Whether we see a large break or a shallow break, we don't know. But seasonally, something tends to cause the cattle market to drift into Turkey Day.

From there, after the NFR rodeo gets underway in Las Vegas, Nevada, we typically see a rally heading into the end of the year.

That's how we're suggesting this continues to play out, barring, of course, any Black Swan events.

We believe the February contract certainly has a shot at moving north of 238 into the new year.

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*This is not trading advice; past results are not indicative of future results*