Cattle: Bull-ish Bubble – 2009 Analysis

Cattle & Hogs Confirming Cycle Crescendos

(Excerpt from 2009 analysis projecting overall advance into 2014/2015)

             03-31-09:  “Live Cattle did decline into a consistent 8-9-week cycle and bottomed on March 11th….the intra-year trends are projecting more downside into mid-year.  This – if it transpires – would dovetail with another very consistent cycle in Cattle… Live Cattle has maintained a very consistent 3-year and 6-yearcycle for several decades. 

             Going back to 1973, Cattle set a peak and then declined for 3 years.  It then surged into 1979, 6 years later, and set a new multi-year peak.  Cattle corrected and then set a secondary peak – 3 years later (1982) – before dropping into 1985 and completing a 6-year decline.  This was followed by a 6-year advance – into 1991… followed by a 3-year decline into 1994.

             Cattle deviated from this cycle when it extended this drop into 1996 but then began a new bull market with an intervening bottom in 2002, 6 years later.  A 6-year advance ensued, into 2008, when an important peak was set.  This sets the stage for the next peak in 2011, 3 years in the future.

             However, within its 12-year bull market, Cattle set its initial peak in 2003 and never gave a monthly close above this peak (even during its spike high in 2008).  This ‘3rd wave’ peak in 2003 also completed a 12-year high-high-high Cycle Progression, connecting tops in 1979, 1991 & 2003.  This was followed by a volatile, 3-year period with an important low – a type of ‘4th wave of lesser degree’ – set in mid-2006.  3 years after this low – creating a 3-year high-low-low Cycle Progression – is mid-2009, when another bottom could be seen… 

             While it is impractical – and perhaps a little too ‘theoretical’ – to be looking this far into the future, the ideal cycle scenario (incorporating all of these 3, 6 & 12-year cycles) for Cattle would be to see a low in mid-2009, a rally into 2011 (3 years from 2008 peak), a drop into mid-2012 (3-year high-low-low-low Cycle Progression) and then a rally into 2015 (3-year high-low-low-low-high Cycle Sequence AND 12-year high-high-high-high Cycle Progression).”

             3-27-14 — For over a decade, since the 2003 highs were confirmed, Cattle cycles have looked ahead to 2014/2015 when a Major top is expected.  Longer-term cycles, including 6-year, 12-year & 40-year cycles – all converge in 2014/2015 and auger a multi-year top at that time.

As stated back in early-2009, Cattle was expected to set a low in mid-2009 (it bottomed in June 2009), rally into 2011, set a subsequent (ascending) low in mid-2012 (it bottomed in June 2012) and then surge into a major cycle climax in 2015.  Well… so far, so good!

(There is an almost-equal convergence of long-term cycles in 2014 – including a 6-year low (2002)–high (2008)–high (2014) and a related 3-year high (2008)–high (2011)–high (2014) Cycle Progression. And, 2014/2015 is 40 years from the double-bottom of 1974/1975… so a multi-year peak could be seen in either – or both – 2014 or 2015.)

Hogs reinforced this longer-term outlook with a low in August 2009 (for the preceding 8 months, Hogs were projected to drop into June/July 2009, at which time a multi-year bottom was expected) and the ultimate blast-off expected after Feb. 2013.

They have a related, 6-year low (Aug./Sept. 2002)–high (Aug. 2008)–high (Aug./Sept. 2014) that dovetails with a 3-year high (Aug. 2008)–high (Aug. 2011)–high (Aug. 2014) AND a 1-year high (Aug. 2011)–high (July 2012)–high (Jul./Aug. 2013)–high (Jul./Aug. 2014) Cycle Progression – all coming into play in 3Q 2014.    IT

Watch July/August 2014!!  (…although a more significant cycle follows that one – later in 2014).

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