Research shows that selling Live Cattle between November 27 and December 8 has averaged a $1034 profit 15 of the last 15 years. Looking at the seasonal chart from Sentiment Trader from November 27 (day 331) until December 8 (day 342) shows a dramatic drop in that time frame.
The optimism index for cattle are nearing excessively optimistic levels. This is what you want to see when contemplating a short futures position......a market which is running out of buyers.
The weekly stochastics and RSI oscillators are at extreme overbought levels. I expect they will turn lower soon.
The contract size of one Live Cattle futures contract is 40,000 lbs. This will be a short term position, probably lasting a month. It would only take just over a $2.60 drop to reach the $1034 average trade profit over the past 15 years. I am looking for some modest exhaustion in trade.
I am not yet ready to pull the trigger yet but could any day. I am awaiting a swing high or an exhaustion candle. If this is the kind of trade which might interest you, I would recommend getting ready now. The margin for one contract is $1,500.
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