8/7/19 was down -0.57 to 82.56.The QQQs are now trading discount to the component by -5.05. The model calculates that the component will need to drop an average of -1.13 per day to close that "Gap". Over the past four days since the downtrend began, the component has declined an average of -0.57 per day. If the component continues to decline at the rate of -0.57 per day, the cash settlement index for the QQQs will be 80.02.

I certainly do not know what is going to happen. Here are some things I am considering:

- Packers' margins have been improving and are currently over $10.00 per hog - not great but better than they were.

- Packers have become very current in their shipments and packer hogs are now -1.01# lighter than the non-packer hogs.

- It appears that the seasonality high has now been posted and the fall downtrend is now underway.

- And most importantly, in order to close the "Gap", packers need to cut their bid prices much more aggressively than they have been cutting.

Based on these points, I am choosing to hold some long QQQs and may do so until cash settlement.

The 6-day moving average carcass weight firmed to 208.41#. That is -0.20# yr/yr. Index hogs were also a bit heavier at 208.36#. Packer hogs are lighter than non-packer hogs by -1.01#. Packers are continuing to ship about 40% of the daily kill.

Best wishes,

Doc