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For: Tuesday 05-18-2010

Falling Off A Hog

The meats have finally hit a wall and have stopped going higher, at least for the short run. We have a quick sell off after the June hogs have broken below the sideways pattern evident on both the bar and the merged market profile chart. We easily see the lower boundary. If we see a rally back into the resistance levels we will look to sell short dated calls as a spec trade.

Aggressive traders may opt to use futures. As always please consult your personal broker at Great Pacific Trading Company to see if this trade is suitable for your account.

Trade Recommendation: On an 8390 print versus the June futures, this week, Sell the 80 June hog call at 80 points on a limit. Risk to the market closing above 8530 or the call tripling in value. (>$640 not including commissions and fees), Look to take profits if the call trades to below 5 points.