Objects were reported soaring just outside Chicago's Loop yesterday during market hours. Denizens of the riverside area around Madison and Wacker were astounded to see something that hasn't been a high flyer for months: hogs.

Yes, friends, we've got soaring swine. For at least a day, anyway. Lean hog prices took off Thursday, due mainly to short covering. While everyone else's confidence in equities was shaken yesterday, those bearish on pork, who have clearly been in control of the market for months, were themselves rattled.

February hogs settled 75 cents higher at 55.20 after hitting an intraday high of 56.00 Thursday. The more active April contract shot up 1.45 to settle at 62.55. No matter what delivery you looked at, Thursday was pivotal.  It's been a long, L-O-N-G time since hog prices managed an upside close outside the previous day's range.

Several technical indicators started flashing signals of short-term bottoming. Stochastics, RSI, the volatility index and MACD are all heralding oversold conditions or bullish turning points.

Hog prices, mind you, still have work to do to climb out of a slump. Bears have just stepped to the sidelines; they haven't necessarily turned bullish. Closes above 57.00, basis February, would confirm a bottom and offer hope for higher prices. Intermediate support lies at 53.55, which would be the next downside target if the bears decide to be, um, hoggish.

Fundamentals, at last look, are still pretty dreary. Hog farmers, still looking for returns on previous investments, haven't yet restrained production. Producers historically cut back, on average, 15 to 16 months after they start losing money. The average-cost producer started losing money on hogs in October, according to the latest studies. If history is any guide, pork production won't likely drop below year-earlier levels until the first quarter of 2009.  

But look on the bright side. For at least one day, you get to see if all those things your parents said would come to pass when pigs actually fly, do.

Pork side dish: Lean hog exposure can be obtained from the following ETFs/ETNs, arranged by weighting:

COW - 31.4%

DJP - 3.0%

RJA - 2.9%

GSG/GSP - 1.5%

DBA - 0.0%

CME Lean Hogs (Feb '08)