June lean hogs on ride of a lifetime

June lean hogs have been on the ride of a lifetime. The front contract made a record high early this month and has traded parabolic since late February.

Yesterday, after 20 new session highs without a three session pause, the contract formed a bearish ‘harami’ (or pregnant line) in candlestick charting. Western chartists might call that an inside day. For my guide, it tells me that there is some disquiet. Additionally, the single session candlestick formation is a bearish ‘hanging man’.

If today’s price action confirms the bearish technical developments from yesterday, we should see a fairly dramatic reverse from this historic high. Right now, LHM4 is -1.375 at 130.750 and a settle anywhere near here or lower would confirm the bearish implications of yesterday’s technical development.

About the Author

Martin McGuire, managing director at TJM Institutional Services

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