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(October 16, 1997) CATTLE:
SHORT TERM–Selling arose as a result of Friday's Cattle on
Feed report. Some analysts are looking for increased cattle
numbers. Boxed beef prices have been softer than hope for by the
trade. Some evening up as a result of the report could occur as the
week winds down.
RESISTANCE–Resistance basis December lies
near 6780, 6825, 6850-6875. 6890, 6930 or
so.
SUPPORT–Support basis December lies near 6700, 6600,
6550-6525.
RECOMMENDATION–The reversal from the near-new
lows bodes well for the cattle. However Friday's report adds an
element of unpredictability to near-term trade. Aggressive traders
might consider buying the December cattle on breaks of 25-50 points
with 50-100 point stops or under 6545. Look for a test of the
6770's, with the potential for a move to near 7000. Traders should
take profits in that area with the idea of re-entering on a
pullback. Option traders might buy December calls for the run to
near 7000. April cattle should be bought at current levels for the
long haul. Use stops of 100-200 points.
M. Steven
Morgan
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