January 29, 2009
CME lean hog bears still in firm command
Chicago Mercantile Exchange April lean hog futures on Wednesday (January 28) morning were seeing a short-covering bounce in a bear market.
However, the bears are still in firm technical command and there are no early technical clues to suggest a market bottom is in place, or close at hand.
On Tuesday, April hogs gapped lower on the daily bar chart and hit a fresh contract low of 60.60 cents a pound. Prices have been trending lower since last July, when prices hit a contract high of 91.90 cents. During January, the price downtrend has accelerated as prices have dropped more than 10 cents during that timeframe.
The next downside price objective for the powerful hog market bears is to produce a close below solid chart support at 60.00 cents a pound, basis April futures. Below that lies longer-term technical support at 58.00 cents and then at 57.50 cents.
For the lean hog bulls to begin to regain some fresh upside near-term technical strength, they would have to first push prices above solid technical resistance at 62.65 cents, which would fill on the upside Tuesday's downside price gap on the daily chart. Above that price gap lies another gap on the daily chart, which would take a price move to 65.35 cents to fill.
