Markets have gone to sleep

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Did anyone set an alarm to wake these markets up? Across the board these markets are sound asleep trading 50% of normal volume. Complacency is here which has destroyed all of the volatility. They will wake up but so far, it’s not earnings season, maybe it will be the FED.

Pundits are drooling over the great earnings, of course they are great because the bar was set at zero. The equities are destined to make new highs, probably soon. Although we are long, we expect the next big move on volume and volatility to be down.

Grains had a solid week of basically go nowhere fast. Corn, Beans and Wheat are all consolidating as they prepare for a run at new highs. All three have made a new near term high and sold off. There is only one concern with the grains, this week they opened strong and closed weak which causes a little concern.

Friday is Cattle on Feed which based on the price action should be a fairly bullish report. Fats made new highs and look to go much higher, while Feeders churned in consolidation. They both look great and have a lot of room to run. Hogs after wild trade for the last few weeks may have picked a direction which is lower. Thursday Hogs may have broken down, we will be watching.

The Dollar finally caved into the pressure from the FED with their new QE program. This week the Dollar got clobbered and looks to be headed lower, I guess manipulation works. Crude may be reversing with a solid week with an uptrend in congestion although we remain short. Gold is flirting with the 1500 level and could reverse any day, another close over 1500 December futures would probably reverse our shorts.

The Bottom Line: Markets can't get much slower, volume is pathetic at 50% of normal, this goes for all markets. Obviously, all markets are waiting for a reason to move, could be the FED, could be anything. We are in our positions and will observe the sleeping giant.

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2019-10-24 Bubba's AG Weekly Report VIDEO

CORN - So far this Corn has done nothing but drift churning around the 390 level. The congestion is healthy as Corn prepares to move up to the next levels. The biggest concern has been the strong opens and weak closes, which is our only concern. The algorithms are long.

Hedge Recommendation: Hedged and Selling Weekly Iron Condors

Position: Long 200% - Will sell half at 4.00

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BEANS - Are starting to look the most bullish in the complex as they continue to churn in a .20 range. We are looking for another breakout to the upside and new highs. However, we have the same concern here that we do with Corn, strong opens and weak closes are not great. The Algorithm is long

Hedge Recommendation: Hedged and Selling weekly Iron Condors

Position: Long 50% - will add at 920

WHEAT - Looks great, tried to breakout to the upside failed, pulled back and is now consolidating. Last week’s blow off resolved itself perfectly. The pattern appears to be setting itself up for the next leg higher which is what we are expecting. The algorithm is long

Hedge Recommendation: Hedged and Selling Weekly Iron Condors

Position: Long 50% - Sold half at 5.15, will add at 5.10

DOLLAR - Has broken down and looks like there is more room to go on the downside. Obviously, the pressure from the new QE program and FED intervention has weighed heavily on the Dollar After the big blow off to the downside the Dollar is consolidating. The Algorithms are short

Hedge Recommendation: Hedge dollars against cost

Position: Short 50% - Will add at 98

CRUDE - Held support and started a small uptrend within the consolidation pattern. Crude appears to be breaking out which could turn our positions to the long side. Although we think there is a play to the 40's is this move continues, we will reverse. For now, the algorithms are short

Hedge Recommendation: No Hedge

Position: Short 300% - Will cover half at 54 unless we reverse first.

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S+P - These markets couldn't deader if they were in a funeral home. There has been absolutely nothing to do as the S+P churns higher targeting the ultimate new highs. We are long but this action is weak, lack of volume and volatility. We won't fight but trade it as the algorithm calls it. The algorithms are long

Hedge Recommendation: Portfolios should be Hedged

Position: Long 100% - Will sell half at new highs.

GOLD - Has been consistent in the recent downtrend and all rallies have been sold. This pattern has not changed, and we are looking for lower prices. There is no expectation of a move higher here at this time. That could change but for now the algorithms are short as are we

Hedge Recommendation: None

Position: Short 200% - Will Cover half at 1480

FEEDERS - Feeders look great an appear paused in congestion before breaking out to the upside once again. We are expecting new highs to show up again. Friday is Cattle on Feed, there could be movement, but we will add on a sell off. Last week we covered November now we will roll to January. Algorithm long as are we.

Hedge Recommendation: Hedged

Position: Long 150% - Will sell 1/3 at 146

FATS - Are attempting to breakout to new highs and could be stalled here in front of Cattle on Feed. Our views have not changed, and we are now targeting 120, Wednesday close on new highs which was bullish. That doesn't mean there won't be a pullback. Algorithm long as are we.

Hedge Recommendation: Hedged

Position: Long 100% - Sold half at 115

HOGS - Have once again reached the moment of truth as they attempt to breakout to the downside. This has been a wild trade the next day or two will tell the story. Watch the 67 level. Algorithms are short

Hedge Recommendation: Hedged

Position: Short 100% - Will add at 67

Go back to the The Ag Report.