There was the Big Chill no we are seeing the big sleep in markets. Although they have all had a direction to trade with Equities higher and Grains lower, these markets may as well be closed. The action, volume and volatility are nonexistent and drifting with the current trend. We know this will end with a monster move the only question is when. |
The FED continues to work its magic which has worked well with equities but not so much with the Dollar. The real problem is the global meltdown and the panicking of the Central Banks globally. For Equities this is setting up to have an ugly finish however the dull market drift can last a long time. The expected Equity move will be much lower which should help the AG space. Remember we know it’s coming but it can't be predicted.
Grains have been in a slow grinding downtrend which is the worst pattern we can experience. If the selling were fast and furious with some panic the turn would be much quicker. The dull grind lower will continue until the banks start to force liquidation which could happen at any time. Wheat looks the best, Corn the worst and Beans at a key point which can go either way.
Meats continue in their longer patterns, Fats and Feeders making new highs while Hogs get slaughtered. Everyone wants to keep talking about the African Swine Flu and why aren't prices higher? Just remember price controls everything and now prices are going lower. With Cattle on Feed on Friday based on the price action it looks like a bearish report. As you know I could care less, price says they are going up either way.
The Dollar has stated to head lower again after the big bounce however its finding some solid support in spite of the FED's wanting to push it lower. Gold is in trouble again and is in danger of breaking down which is consistent with the recent price action. Crude broke out Thursday and looks headed to 60.
The Bottom Line: At this point it’s hard to get excited about anything except possibly Cattle. This dull action is lulling everyone to sleep. We know there is a move coming and our expectations are Grains higher and Equities lower, but no one knows when that will happen. Key markets to watch this week, Cattle, Gold and Crude.
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2019-11-21 Bubba's AG Weekly Report (VIDEO)
CORN - Remains very quiet and in a negative pattern suggesting lower prices are still coming. As we roll from December to March the only change are the levels, but the patterns are ugly. Corn looks to be frozen between 375 and 380. At this point we see no reason to buy. We are short with the algorithm
Hedge Recommendation: Hedged and Selling Weekly Iron Condors
Position: Short 50% - Looking for one more push lower
BEANS - Continue to breakdown and show weakness, nothing has been able to propel Beans higher. The selling has been controlled and organized indicating there is more selling to come. The inability to hold any rallies is also very negative. 900 is a major point to hold or it's straight to 890. We are short. The algorithms are short
Hedge Recommendation: Hedged and Selling weekly Call Spreads
Position: Short 50% - Looks like Beans are going lower.
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WHEAT - Continues to consolidate in a longer term up trend. Wheat is performing the best but also has issues. As we roll to March the new levels re 510 support 525 resistance. Last Friday and Monday there was a false breakdown, but Wheat has recovered nicely. We are short. The algorithms are short
Hedge Recommendation: Hedged and Selling Weekly Iron Condors
Position: Short 100% - Added at 5.2 March
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DOLLAR - Has failed at resistance but appears to have found support at about 97.80. The Dollar has been amazingly resilient based on the hard push the FED has been on. The global meltdown combined with the world central banks trashing their own currencies, the FED should be unsuccessful at pushing the Dollar lower. We are short the Dollar with the Algorithm
Hedge Recommendation: Hedge dollars against cost
Position: Short 100% - The bottoms may be in
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CRUDE - After cracking hard Monday and Tuesday we saw a false breakout to the downside; Crude has reversed and is no breaking out to the upside. 60 is now in play as the next resistance. Long term we are bearish, but our mechanical method is bullish, and we will continue to play the algorithms. They are long as are we
Hedge Recommendation: No Hedge
Position: Long 100% - will sell half at 60
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S+P - Has started to see a little selling however the lack of volume, volatility, and general interest the new highs should continue. We continue to believe the next big move is lower however the dull drift higher could continue longer. We are long with the Algorithm
Hedge Recommendation: Portfolios should be Hedged
Position: Long 50% - Holding
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GOLD - Had some bullish bottoming action early this week but that is now long gone, and Gold looks headed lower. We are using February Gold with the new levels being 1465-1480. Wednesday’s failure at resistance looks bad for Gold, 1440 is in play. We are short with the algorithm.
Hedge Recommendation: None
Position: Short 100% - Will add at 1480
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FEEDERS - After last week’s limit down day Feeders have consolidated between 142 and 145 which is perfect action. As long as 142 holds the bull market is on and that is our expectations. Friday is Cattle on Feed which based on the price action the report appears to be bearish. Algorithm long as are we.
Hedge Recommendation: Hedged
Position: Long 150% - added at 142
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FATS - Remain strong and are testing another breakout level. As we roll to February, Fats look like they will take out the high which brings 130 into play. All signs point to higher prices including the big cash premium. Although we could see a small pullback here, we are looking for new highs. Algorithm long as are we.
Hedge Recommendation: Hedged
Position: Long 100% - Watching Resistance.
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HOGS - The wide sweeping congestion continues with a kick; Hogs are breaking down. We are still seeing big moves in either direction every day. The action itself suggests a big move is coming, Hogs are breaking down. Expect this wide sweeping congestion to continue. Algorithms are short
Hedge Recommendation: Hedged
Position: Short 100% - Breaking down, could get ugly
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