7/6/17 was DOWN -0.14 TO 92.38. The NNNs settled discount to the component by -0.66 and the QQQs were discount by -9.16. Obviously traders are expecting a sharp break in hog prices and that is what we got last year with the index dropping -15.74 from this date until the QQQs went to cash settlement. Last year at this point the QQQs were trading discount to component by -2.83.

But the Index does not always drop from this point until the QQQs go to cash settlement. In 2015 the index gained 1.26 from this point until the QQQs went to cash settlement. Considering how discounted the QQQs are to the component, if that were to happen this year, the Q-Bulls would really "Cut-their-melon". I am not a Q-Bull but considering the"Gap", I'm sure not a Q-Bear either. Actually I am still long a Q-Onezie.

There are seven days of data to come in to get us to the cash settlement price for the NNNs. The model is showing that the component will have to drop an average of 0.10 per day to get the Index down to where the NNNs settled. I don't know what is going to happen and there is not enough trending for the model to project a cash settlement index. From the afternoon reports the model projects that the purchase index will be down suggesting that the up-trend may have now been broken. I hope the morning reports will be released in a timely manner this morning.

Best wishes,

dhm