August lean hog futures on the Chicago Mercantile Exchange have seen a corrective bounce from the recent two-month low of $73.90, which was scored last week. This week’s upside price action has been mostly short covering and some bargain-hunting buying amid higher live cattle futures prices that have hit fresh contract highs this week. Strong upside price action on Wednesday would give the lean hog futures bulls some better confidence that a near-term market low is in place.
The 4-day and 9-day moving averages overlaid on the daily bar chart for August lean hogs are presently in a bearish mode, as the 4-day is below the 9-day. However, a solid up day on Wednesday would very likely produce a bullish line crossover signal, whereby the 4-day crosses above the 9-day moving average.
A close above solid technical resistance at $78.00 in August lean hogs would also provide the bulls with some better upside near-term technical momentum to suggest sideways to higher price action in the near term.
Meantime, a close back below solid technical support at $75.00 would provide the lean hog bears with some fresh downside technical momentum to suggest a challenge of the recent low of $73.90, or even a move below that price level.--Stay tuned!--Jim
