Tuesday, October 26, 2021

#LiveCattle Review #LE_F

Live Cattle Review
Those that view the message of the market on a daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bag holders of trend transitions.

Live Cattle's overall trend, revealed by trends of price, leverage, and time, defined and are discussed in The Matrix for subscribers.

True or false?

Subscriber Comments

Live Cattle's DI reported in the Matrix is useful at times, but it studies the distribution of futures and options contracts across all players. The cattle market tends to focus on the actions of the commercial traders more than other markets, so energy must be redefined. I can do this by asking the computer to focus on the commercial traders (C WA) only.

Chart 1 shows commercial & nonreportables positions bound between 0 and 100%. Readings above 80% are considered bullish. Below 20% are bearish. The computer highlights all bullish concentrations white.

Chart 1:  Live Cattle C & NR WA and Spreading Activity

Chart 2 eliminates NR WA (nonreportables), so we can better see the setups.

Chart 2:  Live Cattle C & NR WA and Spreading Activity

Chart 3 shows which concentrations in chart 2 have more power. Notice the number of white highlight boxes are reduced. An interactive video would highlight the difference better.

Chart 3:  Live Cattle C & NR WA and Spreading Activity

Chart 4 shows which concentration in chart 3 exist within a backdrop of indecision. This cranks up the power of the setup.   The number of white highlight boxes are reduced even further.

Chart 4:  Live Cattle C & NR WA and Spreading Activity

Will last week's COT report be bullish for Live Cattle? Yes and no, last week's COT was not the peak of the powerful setup. C WA peaked in the first week of October at 90%, and has been falling steadily each week to 66% last week.  Last week's COT; therefore, was not the high watermark of the bullish setup. First of October was the heads-up for bulls.

Let's not lose the point of the discussion. Is the setup bullish? YES! I'd call it a 3rd degree bullish setup. If the fourth chart maintained the white highlight box, it would be a fourth degree and extremely rare.

The Matrix wasn't founded as a tool to trade cattle, but I've seen these types of setups before in other markets. The power behind the rally will only dissipate in power as it reaches 156.30. Some might be saying, why wait?

If you have any questions, let me know. The Matrix is more powerful than most realize.

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