December Hogs Outlook and Risk-On Leadership Continues as Traders Await PMI Data and Fed Signals

Barchart · 2d ago

Lean Hogs: Recovery Attempt Faces Critical Test

One market worth watching closely is December Lean Hogs.

According to the technical chart, the market recently satisfied an initial downside PriceCount objective and is now attempting a corrective recovery. Prices have rebounded from recent lows near the 68.00 area and are testing short-term resistance.

However, the chart suggests that downside risks have not entirely disappeared. If the current rebound fails and prices establish fresh sustained lows, a second PriceCount projection points toward potential downside objectives near:

67.97
63.79
56.86

For bulls, maintaining the recent recovery and building momentum above nearby resistance levels will be critical. For bears, renewed selling pressure could reopen the path toward the lower projected targets.

Markets Maintain Risk-On Bias as Traders Eye PMI Data and Fed Commentary

Markets continue to display a selective risk-on tone, with U.S. equity futures, Bitcoin, precious metals, and natural gas attracting buying interest, while several agricultural and soft commodity markets remain under pressure. The focus now shifts to Wednesday's economic calendar, which could provide fresh clues on global growth trends and future monetary policy expectations.

Tomorrow's Key Economic Events

Wednesday's session will be driven by a series of purchasing managers' index (PMI) releases from Europe and the United States, giving traders one of the earliest readings on business activity for the month.

Highlights include:

French Flash Manufacturing and Services PMI
German Flash Manufacturing and Services PMI
Eurozone Flash Manufacturing and Services PMI
U.S. Flash Manufacturing PMI
U.S. Flash Services PMI
Remarks from a Federal Reserve Board member
Weekly Crude Oil Inventories report

Trading Levels for tomorrow:

The PMI reports will be closely monitored for signs of strengthening or weakening economic momentum. Stronger-than-expected readings could reinforce the bullish outlook for equities and energy markets, while softer data may increase concerns about slowing global growth.

Stocks and Bitcoin Continue to Lead

The strongest trends remain concentrated in growth-oriented assets.

Both the E-mini S&P 500 and E-mini Nasdaq futures continue trading near their respective highs, reflecting ongoing confidence in the broader stock market. Momentum indicators remain constructive, with the Nasdaq continuing to outpace many other major futures markets.

Bitcoin remains another standout performer. Recent gains have reinforced the longer-term bullish trend and suggest investors remain comfortable maintaining exposure to risk assets despite uncertainty surrounding interest rates and global economic growth.

Precious Metals and Energy Show Resilience

Gold and silver posted gains and continue to hold above important support levels. The strength in precious metals suggests investors are maintaining a degree of portfolio diversification even as equity markets rally.

Natural gas remains one of the strongest contracts within the energy complex, benefiting from favorable seasonal demand expectations and strong technical momentum. Crude oil has experienced some near-term weakness, but longer-term trend indicators remain constructive.

Agriculture Remains a Mixed Story

The grain markets continue to struggle for upside momentum, with wheat, soybeans, and corn facing selling pressure. While longer-term trend structures remain intact in some of these markets, traders continue to monitor global supply conditions and export demand for direction.

Soft commodities remain among the weakest sectors. Cocoa has experienced significant volatility, while cotton and sugar continue to face downside pressure.

Market Structure:

Bottom Line

Market leadership remains concentrated in equities, Bitcoin, precious metals, and natural gas, reflecting an environment where investors continue to favor growth and momentum opportunities. Wednesday's PMI releases and Federal Reserve commentary could determine whether that trend extends into the second half of the week.

Meanwhile, traders in the agricultural sector should keep a close eye on Lean Hogs, where a developing corrective bounce is facing an important technical test that could influence price direction into early October.

Good Trading,

Ilan Levy-Mayer, M.B.A
Vice President
Cannon Trading Co, Inc. Est. 1988
www.CannonTrading.com
Toll Free: 800-454-9572
Direct Line: (310) 858-6111

Margins / Commissions / Platforms / Professional Traders /Free Demo

Cannon Trading Co, Inc. a CFTC registered Independent Introducing Broker and NFA Member (NFA #0216708), 12100 Wilshire Blvd. Suite 1240, Los Angeles, CA 90025

*Trading commodity futures and options involves substantial risk of loss.
The recommendations contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performance is not indicative of future results*

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