Corn:

Corn closed $.12 lower on volume of 335, 702 contracts. Open interest increased by 8655 contracts. This indicates both new longs and new shorts were entering the market and is a bearish sign as it indicates that the shorts are in control. As my weekend wrap indicated, all of the new longs that entered the market after December 30, but before January 12 are going to have to liquidate as the market moves lower. Stand aside or  wait for further rally before putting on short positions

Soybeans:

Soybeans closed 24 1/2 cents lower on volume of 238, 780 contracts. Open interest increased a minuscule 201 contracts. This action may be indicative that soybeans have found a temporary bottom. Stand aside, or wait for a further rally before implementing short positions. As I’ve indicated before, much of the action in corn and soybeans will be dependent upon weather conditions in Brazil and Argentina.

Crude Oil:

Crude oil closed $.35 lower on volume of 702, 577 contracts. Open interest increased by 14, 064 contracts. The market hit a low of 97.70, which is the lowest price for February crude oil since December 21, 2011 when it reached a low 96.80. Stand aside.

Copper:

Copper closed lower by 1.20 cents on volume of 63, 133 contracts open interest increased by 1, 555 contracts. Copper had a range of $.11 and made a low at $3.579 in the early going. It recovered and closed six cents higher from the low. The action in copper continues to be bullish and confirms the buy signal that I wrote about in my January 11 analysis. The market is overbought relative to its 50 day moving average of $3.46. With an average true daily range of nearly $.11, copper can have violent swings on the downside. If not long, stand aside and wait for a downside reaction.

Gold:

Gold closed down $16.90 on volume of 203, 050 contracts. Open interest increased by 6, 572 contracts. This is bearish market action because ideally you want to see liquidation when the market moves lower. Stand aside.

Silver:

Silver closed $.60 lower on volume of 36, 702 contracts. Open interest declined 1052 contracts. The liquidation in silver continues and at some point silver is going to be a good buy. Stand aside.

Euro:

The Euro closed 1.60 cents lower on heavy volume of 400, 957 contracts. Open interest increased by 11, 801 contracts, which is reasonably aggressive open interest action. The low for the day was 1.2627. As I’ve mentioned before, this area has support going back to August and September of 2010. Shorts should be covered and at the very least, protective buy stops should be in place on any short positions. The Euro continues to build massive short interest, which can be devastating when the countertrend rally occurs.

S&P 500 E Mini:

The S&P 500 E mini closed lower by 2.75 points on volume of 2, 116, 519 contracts. This is the highest volume since December 16 and most of the volume occurred on the downside even though the market rallied up from its lows. Open interest increased by 20, 286 contracts. With the volatility very low, put protection is very cheap and is recommended.

10 Year Treasury Notes:

The 10 year note closed up by 18 1/2 points on volume of 997, 411 contracts. Open interest increased by another whopping 28, 588 contracts. The market is overbought so caution is in order. This market should only be traded on the long side. If not long from lower levels, stand aside and wait for a pullback.

Sugar #11:

Sugar closed higher by 57 points on very good volume of 136, 958 contracts. Open interest increased by 8245 contracts. This market continues to look good. My only reservation is that we are coming into a time of seasonal weakness. In previous posts, I’ve indicated where my pivot points are, but to repeat, a close above 24.91 would be bullish, but not a buy signal. I will be watching the market as it approaches this level and determine when action should be taken.