March corn closed 4 1/2 cents higher on volume of 305, 319 contracts. Open interest declined by 4057 contracts. Bearishness continues in corn and I expect lower prices.
March soybeans closed 25 1/4 cents higher on volume of 185, 349 contracts. Open interest increased by 809 contracts. The outlook for soybeans is still bearish, but weather in Brazil and Argentina could cause a short term rally.
February crude oil closed up $2.01 on volume of 749, 506 contracts. Of the last three days, January 17 had the highest volume. Open interest declined by 12, 630 contracts. From January 4, when crude oil reached $103.74 through January 17 open interest has increased by 8,023 contracts and February crude oil lost $2.02, or 1.96%. I would call this a neutral reading. The market can’t seem to break above the 103.00 area and stay there. Thus, despite the well-publicized tension with Iran, crude oil has basically traded in the sideways pattern.
March copper closed up strongly 9.25 cents on very good volume of 71, 979 contracts. Open interest increased by a very robust 3100 contracts. This market wants to go higher, but is overbought, so any new longs must be cautious and stop protection is mandatory. This is a market that has wide swings in either direction. One way to play the copper market is through its ETN, ticker symbol JJC.
February gold closed higher by $24.80 on a higher than usual volume of 220,183 contracts. Open interest increased by 7594 contracts. Gold reached a new high for the move at 1668. At this juncture, I cannot recommend that this market be traded on the long side. If there is a major setback in the equities market, which I expect will happen, gold most likely will go lower with equities. The market has to close above its 50 day moving average of 1678.90 and it must do it with rising open interest. The next pivot point is 1695.30 and the market must close above that with rising open interest and volume. Stand aside.
March silver closed higher by $.61 on volume of 43, 068 contracts. Open interest increased by 843 contracts. My sentiments about gold are the same for silver regarding the impact of an equity decline on silver. Stand aside.
The March Euro closed higher by 52 points on volume of 373, 667 contracts. Open interest declined by 3, 788 contracts, which is bearish. As I’ve said before, there is a high likelihood that the market is making a temporary bottom. Stand aside.
S&P 500 E Mini:
March S&P 500 E mini made a fractionally higher close of plus.25 on volume of 1, 839, 418 contracts. Open interest declined by 5000 contracts. The market made a new high for the move at 1302.50 and then sold off to close basically unchanged. This is very similar to the market action of January 12, when the S&P 500 reached 1297.50 and sold off to close at 1291.75. On that day open interest also declined by 3, 937 contracts. There is no telling how far the market can go before the rubber band is stretched too far. My opinion is to use protective long puts.
10 Year Treasury Notes:
March treasury notes closed fractionally higher with a gain of 1 1/2 points on volume of 840, 813 contracts. Open interest declined by 4635 contracts. If long from lower levels, stay long with protective of sell stops. Otherwise, stand aside.
Sugar closed up two points on volume of 110, 742 contracts open interest increased by 4302 contracts. The market made a high of 24.22, which was the highest price since January 5 when the market reached a high of 24.52. Since January 10, the market has exhibited a pattern of higher lows. This is bullish along with volume and open interest increases. If you are inclined to take a long position in this market, a reasonable stop would be placed at 22.82, which was the low for January 9. Key pivot points for adding or initiating postions are: 24.24, 24.54, 24.95. A move over 24.95 with a low of at least 24.95 is very bullish.