Just back from Vegas, my seminar, and the rodeo. We had a great week, learned a lot and had fun. It looks like the markets had some fun as well. Equities continue to make new highs; Meats look to be back on track to make new highs and Grains may have found bottoms.
The week saw volume and price volatility return to the markets. If this continues the moves could accelerate, if not we will be back in the same dreary conditions. It appears the Dollar is breaking down, gold consolidating and a lot of action ahead of us.
As we approach the end of 2019, Santa could be paying a visit to most markets. Equities could continue to make new highs; other markets look ready to move in a positive direction. The action should slow down over the next couple of weeks, but you never know.
Grains look much better, we have been long Wheat, are now long Beans and Corn could be close to turning. The trade wars are supposedly settling but as you know our contention was, they are meaningless and only the oversupply has held the prices down. We look for a solid first quarter and a possible big year.
Cattle continues to push higher and looks headed for new highs in both Fats and Feeders. We look for a much bigger move in Cattle and expect an extended rally. Hogs continue to churn in consolidation, the bottoms appear to be in, however we haven't seen them breakout to the upside.
The Dollar has broken down, the FED has finally got their way with a weakening Dollar. Gold continues to churn and is once again at a key point which could finally turn the trend. Crude looks like it wants to break above 60 and test the Drone bombing highs.
The Bottom Line: Trade wars or not, markets appear to be suddenly turning. We could have a very exciting 1st quarter as volume has started to return especially at this time of year. The algorithms have been solid, and we look for a great 2020
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Bubba’s Weekly Ag Report (VIDEO)
CORN - After breaking down on Wednesday, Corn came back into consolidation. Corn may be bottoming but we are still short. There is really one major concern, if the selling begins again the banks will panic. We would prefer to be long but won't fight the algorithm. We are short with the algorithm
Hedge Recommendation: Hedged and Selling Weekly Iron Condors
Position: Short 50% - The bottom could be in - we will be watching
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BEANS - After heavy selling pressure the Beans look like they have made a blow off bottom. The pattern has turned but nothing to do with the trade wars. As long as 9.00 can hold, Beans could be headed to new highs. The algorithms turned long this week as did we.
Hedge Recommendation: Hedged and Selling weekly Iron Condors
Position: Long 50% - 9.00 needs to hold
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WHEAT - Was under a little pressure this week but did manage to close on the highs of the week. Volume is picking up and we expect the rally to continue. We expect new highs, we are long with the algorithm
Hedge Recommendation: Hedged and Selling Weekly Put Spreads
Position: Long 200% - Added at 520, will sell half at 540
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DOLLAR - Has broken down and appears headed much lower. The FED has been working on this for quite a while and appears to have finally won out. The algorithms turned short as did we.
Hedge Recommendation: Hedge dollars against cost
Position: Short 50% - Breaking down will add at 97.30
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CRUDE - The rally continues and closed just under 60 which is the next key resistance. There is a chance Crude will test the Drone bombing highs. 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 50% - Sold Half at 60
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S+P - Broke out to the upside and all signs point to the rally continuing. There is no doubt that this could continue for an extended period of time. There is more volume which could accelerate the action, but the dull market rally should continue. We believe the next big move with volatility will be lower, but the rally could continue for a long time. We are long with the Algorithm
Hedge Recommendation: Portfolios should be Hedged
Position: Long 50% - Holding
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GOLD - Once again Gold seems to have some bullish action, however it still has not been able to breakout. We will remain sellers until we have a reason to reverse, so far that has not happened. We are short with the algorithm.
Hedge Recommendation: None
Position: Short 200% - Will cover half at 1460
FEEDERS - As Feeders struggled and pushed lower two weeks ago, they have now completely reversed and look to be headed to new highs. Although there was almost a limit move on Friday, we have reversed to the long side and expect the rally to continue. A small sell off would be no surprise before the run to new highs resume. We are long with the Algorithm
Hedge Recommendation: Hedged
Position: Long 50% - Will add at 144
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FATS - Breakout and off to the races. 130 is next and based on the action Fats could go much higher. The action is extremely bullish, there are no signs that there is anything that will slow down the Fats Algorithm long as are we.
Hedge Recommendation: Hedged
Position: Long 150% - Will add at 124
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HOGS - As we wrote last week, Hogs may have found a bottom, however until they close over 70, we will be short. This wide sweeping action could continue for a long time. It does appear bottoms are in but and up move is waiting to be confirmed. Algorithms are short
Hedge Recommendation: Hedged
Position: Short 100% - Bottoming action
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