I smell bacon

April Lean Hogs looks like a short. I got a Apr 76 Put for 6.30000. Lena Hogs futures have a value of $400 per point. So 6.3 * 400 = $2,520. My current target is 70.50, although I will probably raise that to 72. My stop loss is if the futures price hits 81, which is just above the 200 DMA and the other lower resistance areas.

So let's say price drops and I get out at 72. That is 5 points under the current futures price of 77. Let's say there's a 57% Delta on the option. (The Delta for an option 5 points ITM right now is 57%). The profit would be about 4 * $400 * 57% = $912. If price goes against me and reaches my stop at 81, that's 4 points over the current price of 77. But the Delta will be less. The  Delta for a current option 4 points away is 36%. So the expected loss would be 4 * $400 * 36% = $576 loss. So the Reward:Risk would be 912:576 = 1.6:1, not great but given the absolute dollar value of the possible win plus the good odds of a win based on the technical analysis below, its acceptable.

The yellow thick lines represent a Head and Shoulders topping formation. The higher yellow vertical line shows the distance between the head and the neckline. The lower vertical line is an exact copy placed under the neckline at the break out point as a projection for where the down move will reach. That price objective is 69.90. This also lines up nicely with a previous low around Aug 6th, as marked with a red line.

I also marked a downward channel price has been in since about Oct 15th. If price hits the lower trend line of the channel it'll probably be around 69.90. And we're currently near the top of the channel, so that controls how much we need to risk if we break out to the upside and increases the likelihood of heading down to the other side of the channel.

We've already had 2 drives down marked with thick white angled lines. The second white line is a copy of the first but moved down to line up with the top of the second swing down starting 11/13/19. If we start a down leg from where we are today, then the 3rd white line will be starting in the right place and projects down to about 70.50.

Price is also under the 200 and 50 DMA's, which is generally bearish, and Stochastics are over 80% which suggests we might be near a swing top.

Price is retesting 3 different resistance levels, the Head and Shoulders neckline, the 50 DMA, and a horizontal Support and Resistance line at about 78.40, marked on the chart with a red line near the neckline.

Price has been consolidating between the 50 DMA and the 8 EMA as well as between the 2 support and resistance lines I mentioned. Eventually it will probably break out either up or down. All the above observations suggest it will be to the down side.

Finally, the high price of the current consolidation (78.30) is between the 50% and 61.8% retracement of the recent down move from 83.00 to 71.90. I didn't show it because the chart is already too busy. Its easy enough for you to draw it on a chart if you want to verify it.