in a period of uncertainty relative to hog prices. There are 49-calendar days and 35-trading days until the JJJs go to cash settlement. We know that on 4/17/17 the 9.14 "Gap" we are now looking at will be closed. The big question is, "How will it close?"

There are only two variables but that is enough to make the solution to the problem difficult. For the index to get down to the futures, the component needs to drop an average of 0.25 per day. The average drop for the past two-days is -0.33. If that is the track we are now on, the Cash Settlement Index (CSI) will be 65.30.

The model projects that the component on Friday's kill is going to be about -0.50. That will be a 3-day average decline of -0.39. If that is the track we are on, the CSI will be 63.45.

49-days ago the index was at 58.85. If the next 49-days gives us a complete re-trace, the index will drop to 58.85. I certainly don't know what is going to happen but I will be more than a casual observer.

The situation reminds me of Morris, an 83-year old widower who went to see his doctor for a check up.

A few days later the doctor saw Morris walk down the street with a gorgeous young chick on his arm. The next time the doctor saw Morris the doctor said, "I see you are doing all right."

To which Morris replied, "Doing just what you said, Doc, 'Get a hot momma and be cheerful."

And the doctor replied, "I said "You got a heart murmur and be careful!"

And that is about where we are, "Be careful."

This uncertainty could keep the calendar spreads jumping up and down in a very random manner so I will keep working them. Tic-by-tic we will see technical/emotional factors cause the market to make exaggerated moves that ITZ will love with his fishing gear and I will use a Trend-line reversal system to try to catch some of the suckers ITZ throws back. We are too far from cash settlement for my model to have much value but when we get closer, I will use it as a tool to help me get a position to take to cash settlement.

I may not thrive during this chaotic period but I hope to survive and I hope the market treats you well also.

Best wishes,

dhm

PS: I would like to hear some thoughts on the cattle on feed report.