There is a beautifully wide 1-2-3 top forming in February Live Cattle Futures. Notice that the #1, #2 and #3 points are weeks apart. Also the 50% retracement level on the Weekly Chart is at 126.525, leaving lots of downside profit potential. Markets generally move down faster than they move up, so we expect a rapid drop in Live Cattle prices if prices collapse below the #2 point at 131.25. Since this 1-2-3 top formation is so wide, we can expect a nice drop even past the most recent major move (shown by the 50% retracement level on the Weekly Chart) and further down the next most recent move from the low of 112.225 shown the Weekly Chart.
This is a great trading opportunity shaping up. We will watch close for prices to fall below the #2 point and then short the Live Cattle market.