8/8/19 was down -0.47 to 82.10. The QQQs are trading discount to the component by -4.22. The model calculates that the component will need to crash by -1.10 per day to close that "Gap". On average over the past five-days the component has fallen by -0.55. For several days I have been saying the down-trend does not seem to be strong enough to close the "Gap". Today "The Market" seems to be coming to that same sentiment and pushing the QQQs up a little. If the down-trend stays at the -0.55 rate we have seen the past five-days, the QQQs will go to cash settlement at 80.18.

Obviously I don't know what will happen. I am just sharing the numbers with you as the USDA makes them available.

The 6-day moving average carcass weights were steady at 208.42#. That is -0.32# yr/yr. Index hogs were a bit heavier at 208.48#. Packer hogs are lighter than the non-packer hogs by -1.20#. The percentage of packer hogs in the kill mix jumped to nearly 50% yesterday. For several week we have seen packers shipping their hogs at a brisk clip. I think this tells us that they are getting rid of their hogs as quickly as they can.

And why would they do that?

Either because they cannot round-up non-packer hogs or else because they are planning on lowering the hammer on their bids.

The supply of hogs seems to be ample so my guess is they are planning on dropping their bids in a MAJOR way.

But that is not news. It always happens that the price of hogs decline in the fall and the futures market has already priced in a significant decline with the ZZZs down at 65.35.

The question is, "Does the collapse occur before or after the QQQs go to cash settlement?"

My money says, "After!"

So I bought another QQQ pig this morning.

Best wishes,

Doc.