MURICO.com Forum

The final Purchase Index for - - -

11/8/18 was down -0.33 and the model projects the component on yesterday's kill will drop between -0.25 and -0.55. We are clearly in the fall downtrend now. It appears that packers did not want very many hogs yesterday, thus the lower bids and they only purchased 78.8% of the moving average daily purchases of total hogs and 87.1% on the index hogs.

Yesterday the component stood at 63.20 and the ZZZs are now trading discount to the component by -8.87. That is quite a "Gap" that will require a 10-point ITZ move to close.
Several days ago I concluded it was time to get short the ZZZs and that turned out to be the right move.

There is a good chance that the summer futures are being beat-down too much in sympathy with the weakness of the front month so I am still long the summer months and waiting for the dip to intensify so I can add more longs. The last few days has taken its toll on my margin. That's why I keep my positions fairly small and my margin reserves quite large.

Best wishes,

dhm

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