October lean hog futures on the Chicago Mercantile Exchange on Thursday gapped lower on the daily bar chart and hit a fresh six-week low of $68.50. This comes after another big gap-lower move on Wednesday that saw prices close down the $3.00 trading limit.
Major near-term chart damage has been inflicted with the price action of the past two days. Prices were already in a steep three-week-old downtrend from the contract high of $78.75, scored on Aug. 8.
The next downside price objective for the powerful lean hog bears is pushing and closing prices below strong technical support at the July low of $68.40. A close below that support level would produce still more chart damage to suggest a price move down to the April low of $65.25, basis October futures.
For the hog futures bulls to regain upside near-term technical momentum they will have to fill on the upside this week’s downside price gaps on the daily bar chart. For the bulls to fill today’s downside price gap, they will have to push October futures prices back above $70.50. Above that lies solid technical resistance at the top of Wednesday’s downside price gap, located at $73.35.
The hog market bulls can pose a lukewarm argument that spike lows in early April and early July resemble price action that has just occurred in October lean hogs. Shortly after those spikes down in prices, October hogs posted a very quick recovery and went on to post fresh contract highs.
