7/21/17 was down -$0.85 and the model projects that the component on Friday's kill will fall between -0.35 abd -0.65. The model is showing that the component will need to fall by about -0.62 per day over the next 16-data-days if all of the "Gap" closing is to come from a collapse in the price of hogs. Last year during the same time period the index fell -9.42.

However -

In 2015 it actually gained +0.16 which is not much but would seem like a lot if the GGGs are already discount to the component by ten or so points.

In 2016 cutouts fell by -14.20 while in 2015 they gained +4.70. Clearly the key toi where the QQQs go is dependent upon the price of cutouts and that is a reflection of demand. Needless to say the drop or -1.24 in cutouts Friday caught my attention and I will be looking carefully at what happens today.

Friday I ended the day with two more QQQ than I started with. The pre-opening quotes looks like the market is going to punish me for the folly of my ways.

Best wishes,

dhm