Live Cattle Futures (CME.LC) were up 0.4% on a gain of 0.45¢ Thursday, with a closing price of 101.075¢. It experienced a trend day up, where LC opened in the lowest 20% of the days range and closed in the highest 20%, and the five-day moving average crossed below the 20-day average. Lets look at what has happened in the past after LC has a trend day up in the month of August when small traders are short?
Q: How has CME.LC performed in the past after having a trend day up in the month of August when Small traders were short, omitting any repeat occurrences within 10 trading days?
A: According to the 17 previous occurrences of this event, EventEdge indicates that CME.LC has shown a strong bullish edge that peaks seven trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Thursday, Aug. 28, 2008) is Tuesday, Sept. 9, 2008. CME.LC rallies in 94% of the cases (16 of 17) by an average of 2.2% relative to the close on the event date. The average of the one decline is 0.6%. The overall return of the 17 cases is 2.1%, which, based on the close of CME.LC on the event date (101.075), provides a target price of 103.198.
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Jeffrey Garceau is an analyst with MarketHistory.com.
