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May 19, 2025
Classic Cattle Downside Reversal Last Week
Being wrong is inevitable in this business, and that has definitely
been the case in my Short Cattle recommendation…However, having been
wrong does NOT mean I will continue to be so…and I absolutely, MORE
SO THAN EVER, still see this trade as having monster potential...bigger,
really, than I’d ever imagined. RIGHT HERE. RIGHT NOW. I urge you
to not blow this off as “He just won’t give up or admit he’s wrong on
this,” and put some money on the table. Aside from my belief that these are
sky high un-maintainable prices, with last Friday’s lower weekly close (in
the face of supposedly bullish Mexican Screwworm news), we do have possible
evidence that the top tick has been made. And if that is the case, I
will remind you that when the Cattle Complex DOES turn, going back fifty
years, it has typically been followed by BIG, SHARP AND RELENTLESS MOVES ON
THE DOWNSIDE…
Why now?
For one…plain and simple…just where we are
historically…I don’t care how “logical” the bullish fundamental story is,
at EVERY top I’ve ever seen, there is NEVER any reason when the turn
actually comes. It just happens. The jet flames out…and for real, the
bigger they are, the harder they DO fall. I have seen it countless
times…CRAZY BIG bull markets that were accompanied by nothing but 100%
“bullish fundamentals” that stopped dead, quietly turned, and then went
back down to levels, that, at the top…considering the unanimously bullish
story…would have been considered almost impossible…
With that in mind,
here are a few examples of how big bull markets DO turn down…where,
“straight up” bull moves in this MOB PSYCHOLOGY FUTURES GAME were then
followed by “straight down.” And one more time, do not even
THINK that there was some magic moment news item or story, at ANY of these
tops that said, “Get Short Now!” And do note that, much more often than
not, these reversals start by TRULY going “straight down” on their
way to 50-70% ABSOLUTELY UNEXPECTED DECLINES…AS BULL MARKET TOTAL COLLAPSES ARE PRETTY MUCH A
NORM IN THE FUTURES MARKETS…and I assure you, THE CATTLE COMPLEX WILL BE NO
DIFFERENT.
HOW BULL MARKETS DO REVERSE…AND DO COLLAPSE… AND DO GO
DOWN 50-70%...ROUTINELY.
And don’t kid yourself. The Cattle market and the
current cattle “story” are NO DIFFERENT FROM ANY OF THESE EXAMPLES.
LAST WEEK STARTED WITH THE
EXTREMELY BULLISH NEWS BEING THAT THE UNITED STATES WAS BANNING CATTLE
IMPORTS FROM MEXICO DUE TO A SCREWWORM OUTBREAK THERE…AND WHILE BOTH CATTLE
CONTRACTS LEAPT HIGHER THAT DAY, THEY BOTH FINISHED THE WEEK WITH LOWER
CLOSES. MAYBE THIS IS IT…MAYBE IT ISN’T…BUT THIS IS HOW BULL MARKETS OFTEN
DO MAKE CLASSIC TURNS…THAT IS, BASICALLY IGNORING BULLISH NEWS AND
REVERSING DOWN.
And these two charts may look like, “so what?”, but they
ARE perhaps quite significant…
So, yeah, I’ve said this before (ALL of this really…I know) but what you
DON’T do here is start thinking…wondering if this is it, or looking for
some “sign” that the top has been made, or hoping for some perfect day to
get on…For my money you, just take one look at the long term chart…and the
weekly reversal lower…and just do it.
I definitely want to be in both markets as there are
times when one moves much bigger than the other…But I also think you can
take either one of these options on its own.
Yes…I have been on this
forever, and it has been personally quite costly, but that does not deter
me from initiating positions here as I DO know that the chart and profit
projections I have drawn here are absolutely realistic…that this trade
still does represent massive profit potential…and I fully intend to be
there…and most importantly, STAY there, when it happens…and I DO
think the odds are extremely high that this INEVITABLE (in my opinion)
COLLAPSE IS NOW DEAD IN FRONT OF US. Obviously, if you take my recommendation,
and I am still wrong, you can lose every dollar you put on the table…but I
DO THINK WE ARE FINALLY THERE.
I will be updating other markets in the
near future…but right now, getting positions on in Cattle are absolutely my
primary focus. I honestly don’t think it EVER gets any better than
this…that Short the Cattle Complex is a once a decade sort of opportunity.
Contact me if you are
interested.
Thanks,
Bill
770-425-7241
866-578-1001
All
option prices in this newsletter include all fees and commissions. All
charts, unless otherwise noted, are by Aspen Graphics and CRB.
FUTURES
TRADING IS NOT FOR EVERYONE. THE RISK OF LOSS IN TRADING CAN BE
SUBSTANTIAL. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE
FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST PERFORMANCE IS NOT
INDICATIVE OF FUTURE RESULTS. THERE IS NO GUARANTEE YOUR TRADING EXPERIENCE
WILL BE SIMILAR TO PAST PERFORMANCE.
The author of this piece currently trades for his own
account and has a financial interest in the following derivative products
mentioned within: Feeder Cattle, Live Cattle
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