CME Lean Hog futures (CME.LH) closed up 0.25¢ per lb. on a 'trend day' rally pattern to close at 59.15¢ per lb., and the high of the day, 59.25¢ was a new 20-day high. Hogs have achieved a 'large' five day gain of 5.6% as well. What does history say about the price action during April?
Q: What is the historical percent change performance of lean hog futures over the next 25 trading day when the following conditions are true: The month is April, it forms a 'Trend Day' rally, is strong enough to return a 'Large' five-day gain, and the high trades above the previous 20-day highest, omitting any repeat occurrences within 10 trading days.
A: According to the 11 previous occurrences of this event, EventEdge indicates that CME.LH has shown a very strong bullish edge that peaks five trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, April 8th) is Tuesday April 15. CME.LH rallies in 91% of the cases (10 of 11) by an average of 2.7% relative to the close on the event date. The average of the one decline is 0.1%. The overall return of the 11 cases is 2.5%, which based on the close of 59.15¢ provides a target price of 60.629¢.
If you would like to see more details of this historical edge, go to www.markethistory.com
According to CME contract specs, the last trading day is the 10th business day of the month which corresponds to April 14th, and it cash settles on the 16th.
Darren Fabric is an Account Executive with Logical Information Machines.
