from the psych side. Could just be part of my hallucination process but I do repeatedly see these types of patterns play out at bottoms. Whether short term or longer term we'll have to wait for the jury to make judgement which it will likely wait for a Monday surprise. Since the human mind is addicted to logic of some sort to find reasons. Even though I have learned to take logic with a grain of salt, I'm still trapped with the human addiction for logic even though mine tends to search for the psychological logic since the markets seem to make such good use out of it when setting the traps. I've fallen victim to too many traps so I've gotten wise to some and the clues are always there if you have the willingness to search.

Since back in Dec each new break of a previous $3-$4 bounce support low, carried a 5-6 dollar downdraft. The break of the 66.15 support from Feb 5th only had a $2.50 downdraft to find support at 63.67 to create a 3.17 bounce that did downdraft for a new low but only lower by 45 cents. Now we are working on a new high above previous bounce high of 66.85 working on a similar 45 cent new high to balance the previous 45 cent new low. Yesterday we had a higher daily close for day 1 of a new 9 day cycle count. that is the first clue I like to see for making a bottom picking attempt so yesterday afternoon I bot 1 @64.50 to test the waters for the 1st stage of a qualifier cycle low attempt. This pattern in place on the 60 min chart for the last daily count cycle from Feb 9th shows up in similar form for almost every reversal cycle that brings on a 3,5,or 9 week reversal for $5-$10 retracement rally or sideways congestion. I label it my X pattern, I won't bore you with the definition but it shows at a high percentage of top or bottom reversals. The confirmation test will be in, if a new low fails to happen by Monday. The magnet may have gotten switched on for my first retracement target at 68.50-69.00.

The psych element tells me that smaller new lows are bringing quick profit taking with a lot probably being bigger money looking at a better risk reward in a retracement rally since the downside is running out of sellers. The market needs a 5-10 rally to balance out the risk reward ratio. Sometimes the market has to go up to be able to go down another leg if that's on the menu to happen. The fact is confirmed higher numbers, hog expansion, poor demand. The rumor that numbers were high, expansion had started gave birth to the bear downtrend back in Nov-Dec when it was just a guess rumor. The hog report gave those rumors credibility and then the Port strikes cutting demand sealed the deal into the expiration of the Feb contract. Rumor is now confirmed fact which has created one of the largest $ cycle swings for downside the hog market has ever witnessed. What usually happens soon after rumor becomes fact. In this case of sell the rumor, we can now look to buy the fact.

Buy the fact is unlikely to have similar sized results as we saw with sell the rumor. Now that selling rallies is somewhat of a no brainer going into the next 2 months, I doubt it will be as lucrative or as easily profitable. The market has to re balance and can only do that with retracement rallies. $5 is minimal but $10 is needed to comply with the balance addiction but that may not happen until May or June become front month and have their seasonal premium already giving the balance fix.