Corn:

March corn closed unchanged on volume of 345,597 contracts. Open interest increased by 10, 312 contracts. The market made a new high for the move at 645 3/4. The market’s daily low has not been above my key pivot point of  637 5/8. Additionally, the market has enormous overhead resistance at its 150 day moving average of 6.63 and its 200 day moving average of 6.66. The high for corn in January occurred on January 3 at  664 1/4 and from January 4 through January 11, the market was not able to surpass that high despite a massive build up in open interest, just before the January 12 USDA crop report. If the market is able to achieve a daily low of  637 5/8, the upside seems limited to the above mentioned moving average highs and the January 3 high.

Soybeans:

March soybeans closed 9 1/4 cents higher on volume of 125,678 contracts. Open interest increased by 1522 contracts. The high for March soybeans occurred on January 3 when the market touched 1244 3/4. This was the highest price for soybeans since October 28, 2011. If short, 12.44 would be an ideal place for a buy stop. The key pivot point that soybeans need to penetrate to partially confirm the beginning of the downtrend is 1202 7/8, and after that would be 11.90 1/8. The weather in South America will have an influence on how this market behaves in the short term.

Sugar #11

March sugar closed 22 points higher on volume of 93,098 contracts. Open interest increased by 6864 contracts. For the last several days there has been a huge build up in open interest. I will discuss this in greater detail in the weekend wrap. Sell stops should be placed at 22.82. As I’ve said before, this is a weak period for sugar on a seasonal basis.

Crude Oil:

March crude oil closed higher by $.30 on light volume of 492,991 contracts. Open interest increased by 12,566 contracts. During the last four trading sessions, open interest has increased by 30,674 contracts and price has advanced $1.43. There is a battle going on between the longs and shorts and it appears that the market will shortly have a decisive break one way or the other. Stand aside.

Copper:

March copper closed higher by 7.20 cents on volume of 56, 113 contracts. Open interest increased by a whopping 3969 contracts. Copper made a new high for the move at $3.910. Since my call in copper that I made about two weeks ago, the market has advanced $.40. However, the market is well overdue for a setback. If long from significantly lower levels, partial profit taking is in order. Stops should be placed on the remaining position based upon your risk tolerance and sound money management. Do not enter new longs at this point.

Gold:

February gold continued to climb higher and closed up $26.60 on heavy volume of 311,647 contracts. Open interest decreased by 1287 contracts. The weakness in the US dollar is driving gold and a number of other commodities higher. As I pointed out before, this can reverse at any time. Although I am friendly to gold, my opinion is to continue to stand aside for now.

Silver:

March silver closed higher by $.62 on light volume of 38,268 contracts. Open interest decreased by 510 contracts. This market continues to disappoint in its volume and open interest action. I will provide more detail in my weekend wrap.

Euro:

The March Euro closed higher by 23 points on volume of 279, 792 contracts. Open interest declined by 3041 contracts. My opinion on the euro was to cover shorts in the low $1.26 area two weeks ago. Since that time, the euro has advanced over five cents. The market still has a huge number of shorts and can continue to work higher. Stand aside.

S&P 500 E mini:

The March S&P 500 E mini closed down 5.50 points on volume of 2,024,845 contracts. Open interest increased by 24,639 contracts. The market made a new high at 1329.75 in the early going, and closed lower on the day. This is the second day that the S&P 500 E mini has shown a healthy increase in open interest. This means one of two things. Either the market is going to  make a new leg higher, or it is indicative of speculators who are late to the party. One noticeable discrepancy in yesterday’s action was in the S&P 500 cash index. Although the market was down only 5.50 points the number of advancing issues on the S&P 500 was 149 and the number of declining issues was 346. The NASDAQ 100 exhibited the same lopsided advance decline numbers. For example, there were 28 advancing issues and 69 declining issues. This contrasted with the the New York Stock Exchange, which had 1495 advancing and 1546 declining. In other words, the broad market was stronger than either the S&P 500 or the NASDAQ 100. This was confirmed by the number of new 52-week highs of 357, which for the first time, surpassed the 270 highs made on December 27. Another matter of concern is that the volume in the S&P showed that the net volume was approximately a negative 1,755,000 shares. There is far more risk on the downside, than there is profit to the upside. Long put protection should be in place.

10 Year Treasury Notes:

March treasury notes closed higher by 21 1/2 points on heavy volume of 1, 332,004. Open interest decreased by 3592 contracts. In yesterday’s post, I mentioned that the open interest increase of 14,683 was relatively minor in relation to its very heavy volume. With another solid advance two days in a row on heavy volume, both longs and shorts are liquidating as we get near the top of the trading range. My opinion is that partial profits should be taken at these levels, with a stop on the remaining position based upon your risk tolerance and sound money management practices.