I like the firmness of cattle with the even basis, cash trade done for the week, an on feed report today and abbreviated kill week next week.

These factors in the past have been negative towards cattle. Not today though. The subtle changes are being recognized by more traders and while supply from numbers may remain elevated for several more months, the industry is fighting tooth and nail to rectify anything they can to keep this issue from causing further price declines.

Sideways? -- The market may consolidate a few days, but then I anticipate it could move on up.

Not much activity has been noted for grocers the past few weeks. However, I have noticed restaurants going back to side items with their beef dishes. Both Longhorn and Outback restaurants are featuring their steaks with a shrimp or chicken side. Although this does keep beef on the forefront, a larger-portioned steak item would be nice to see. One can only presume the reason for this siding is cost.

The on-feed report is perceived construed as friendly. Fewer placements in October would increase the impact weather may have in the weeks to come. More often than not, we tend to associate drought with summer heat. The drought occurring now may have started in the late summer, but its progression into late fall and soon early winter is perplexing.

The southeast cannot rely on snow fall to replenish subsoil moisture. Grass and wheat pastures are gone for the winter and supplemental feed is the only choice. Water can be hauled for a little while, but any increase in input costs will be met begrudgingly.

Last, take note of the follow-through some markets have made after the election. There are times when disruptions in the market are faded, negated or have follow-through. With the first two seemingly more common than the last, the continuance of direction in the gold, bond and equities markets leads me to anticipate further movement of these markets in their current direction.

Bonds and gold have set new lows in this decline today. Equities are back at their historical highs with the Dow continuing to make new highs.

In my opinion, these are telltale signs that the markets, and therefore people, like the aspect of our new president elect. If they did not, there is no doubt in my mind the markets would tell us. The selloff in gold is perceived as a mark of confidence. No longer does the fear of the unknown need to be hedged with gold. The selloff in bonds is perceived as a mark of confidence. No longer does the desire for a safe haven asset have the same appeal as it did when the Fed was manipulating rates. Manipulation by its own definition suggests something is not as it should be. Lastly, the money that comes out of gold and bond positions is perceived in need of a home where the assumption of risk can produce a reward. Hence, the equities markets have benefited greatly from the change in confidence.

Whether you like the new president-elect or not, I strongly urge you to not fade the current market directions at this time.

Where feeder cattle are concerned, rarely does a specific situation cause a specific price move that when rectified the price action nearly mirrors the up and down move.

As the markets appeared to be healing toward the end of August 2016, it began being noticed that heavier cattle were coming to market. As the rumor turned to fact, traders pushed fats and feeders down in response to the growing numbers of overweight cattle.

Upon some rectification of this situation, the chart pattern on the way down is being mirrored in the chart pattern moving up. It's almost like steps down were taken to relieve the situation and now steps up are being taken as the situation is being relieved.

It is possible that I just want to see this, but so far, the patterns I've projected out into the future has only been off by a couple of days so far. This is why I keep that H & S pattern on the January contract.

What I really don't know is how the drought in the southeast is going to impact production cycles. It is not that there will be any reduction of inventory, just where it is displaced to and by how long that displacement impacts its growth. If you're privy to this, I'd sure like to know. Other than that, there is not much to discuss. A few more days sideways and I would anticipate a resumption of the uptrend soon.