7/24/14 kill was down -0.34 to 130.03. This drop, together with the pop in the HEQ4 futures, has closed the discount of the futures to the index to 5.93. The component drop was a bit less than the model projected. This may indicate that the rate at which packers are lowering their bids is slowing. It has been my feeling that it was not likely that the entire gap would be closed by a drop in the index but the QQQs would probably tack-on a little. We are seeing the QQQs move up a little today and there may be more before we get to cash settlement.

Considering the uncertainty surrounding the damage caused by the PED virus and the softness in the cutouts the past few days, there will most likely be quite a bit of volatility giving traders scalping opportunities from either the long or the short side.

I'm still long a couple of QQQs and just missed a sell signal to scalp out of one. The market may give me another chance before the day is over.

Best wishes,

dhm