March corn closed 1 1/4 cents higher on heavy volume of 406,808 contracts. Open interest increased by a heavy 14,368 contracts. The battle between the longs and shorts continue and it doesn’t appear that longs are winning the battle. The dollar index was weak, which should have provided more upside to corn. The market continues to trade in a range bounded by 6.25 to 6.45. At this juncture there is no reason to be involved in corn.
March soybeans closed 4 1/2 cents higher on very heavy volume of 270,964 contracts. Open interest increased by 673 contracts. Beans reached a new high for the move at 12.80 and made a new closing high. If you’re not long the market, don’t chase it at these levels. If long from lower levels, move up stops to protect profits and capital.
May sugar closed 15 points higher on healthy volume of 144,961 contracts. Open interest increased by a minuscule 1,069 contracts. As I indicated in yesterday’s report, the market has moved above my key pivot point and the daily low was above it as well. As I stated yesterday, pullbacks should be used as buying opportunities with a stop for May sugar at 23.81.
April crude oil closed $1.55 higher on volume of 739,188 contracts. Open interest increased by 6,127. The market wants to move higher, and the weakening dollar and excess money printing by central banks and Iran tensions has been the catalyst. Despite this, continue to stand aside. If there were a favorable development in the Iran situation, the market could have a pretty significant tumble.
April gasoline closed 2.50 cents higher on light volume of 132,828 contracts. Open interest increased by 1,371. The market made a new high at 3.2997. It is interesting to note the headlines are about gasoline, but heating oil has moved up sharplyas well. Daily volume in heating oil consistently outpaces gasoline. As an example, on February 23 heating oil traded 184,807 contracts, which was 51,979 contracts more than gasoline. Continue to wait for lower prices before entering new longs.
April gold closed $15.00 higher on volume of 167, 575 contracts. Open interest continued to rise with the rally by adding 4,333 contracts. As I’ve said before, do not chase the market higher, but wait for a setback before entering new long positions. The gold volatility index GVZ is at lows last seen in August of 2011. With the volatility component of options inexpensive, options are cost-effective way of trading the market.
March silver closed $1.30 higher on very heavy volume of 102,483 contracts. Open interest increased by a substantial 4,871 contracts. The declining dollar has benefited both gold and silver, as has the excess printing of money and tensions with Iran. The market is extremely volatile, and great care should be taken if one decides to trade this market. March silver’s 50 day moving average is 31.39, which means silver is 4.00 overbought relative to its moving average. If the speculator wants to trade silver, a much safer way to play it is through silver ETF’s.
The March Euro closed 91 points higher on volume of 322,144 contracts. Open interest decreased by 6,486. The market broke through its February 9 high of 1.3325 to make a new high at 1.3386, which was the highest price for the March Euro since December 12, 2011. As I stated on a number of occasions, anyone who was long puts, short calls, short futures or any combination thereof, should have liquidated these positions once the Euro reached its February 9 high. I will continue to monitor the Euro and look for another spot to implement bearish positions to profit on the eventual downside move in the Euro. Stand aside.
S&P 500 E mini:
The March S&P 500 E mini closed 7.00 points higher on volume of 1,606,894. Open interest increased by 6,976 contracts. Despite the market moving higher, the lack of volume in futures and the cash S&P 500 index indicates a lack of enthusiasm of longs at these levels. The market is facing headwinds, which include tensions with Iran, higher petroleum prices, and especially higher gas prices. Long put protection should be in place.
10 Year Treasury Notes:
March 10 year treasury notes closed 5 points higher on heavy volume of 1,635,044 contracts. Open interest increased by 25,843 contracts. Although volume was the highest in at least two months, the open interest increase was fairly muted, which was reflected in the small net change from the previous day. The market hasn’t given a definite bearish signal yet. I will continue to monitor notes to evaluate whether the market is in fact changing trend. If the stock market moves sharply lower, we should see a spike higher in notes prices. Stand aside.