May corn closed $.04 lower on very light volume of 256,524 contracts. Open interest increased on the decline by 1,587 contracts. As I pointed out in yesterday’s post, open interest has been declining on rallies lately, and on Thursday, open interest increased on the decline. Both of these are negative for corn. However, the market continues to trade above my key pivot point of 6.45 1/2. If long, use tight sell stops. A breakdown in the stock market, or sharp rally in the dollar, could send corn lower.
May soybeans closed 2 1/2 cents higher on light volume of 172,446 contracts. Open interest increased by 3,171 contracts. As I pointed out in yesterday’s post, speculators should take partial profits on long positions, and/or move up stops. If not long from lower levels, do not chase this market.
May sugar closed 16 points lower on light volume of 100,124 contracts. Open interest declined on the move by 10,047 contracts, which is healthy after the massive open interest build. The market made a new low for the move at 24.45, which was two ticks above the February 23 low of 24.43. In my previous posts, I suggested that speculators look to enter long positions on a 75-100 point decline from the high of 25.81 made on February 27. If long, place stops in accordance with risk tolerance and sound money management principles.
April crude oil closed $1.77 higher on good volume of 864,500 contracts. Open interest increased by 20,269 contracts. The market made a new high for the move at 110.55 on rumors of damage to an oil facility in Saudi Arabia. After the rumor was was dismissed the market settled back to close at 108.84. Stand aside.
April gasoline closed 9.45 cents higher on heavy volume of 176,612 contracts. Open interest increased by a very healthy 5,457 contracts. Continue to stand aside and wait for a setback of 20-30 cents.
April gold closed higher by $10.90 on relatively strong volume of 259,338 contracts. Open interest declined by 4,797 contracts. Although the market rallied, and the low for the session was 1695.10, which was approximately 7.00 higher than the previous day’s low, nervous longs and shorts liquidated positions. This is a very healthy for the market because it removes potential selling pressure and deceptive rallies caused primarily by short covering. As I stated in yesterday’s post, gold in the low 1700s represents solid value with the 50, 150 and 200 day moving averages trading in a range from 1,669.00 to 1,713.00. All major bull markets have shake outs and we certainly witnessed that on February 29. As I mentioned in yesterday’s post, the February 29 low of 1688.40 should be used as an area to place protective sell stops. I suspect if the equities market rolls over gold and silver will go with it. If the stop is triggered, there is always an opportunity to get back in the market at lower prices.
May silver closed $1.01 higher on volume of 66,475 contracts. Open interest declined by 1,158 contracts. The volume on the rally, was almost half of the volume (127,562 contracts) of the previous day. I suggested for those who want to be long silver that they use any number of silver ETFs.
The March Euro closed 23 points lower on light volume of 252,978 contracts. Open interest declined by 2,045 contracts. The market has not been acting well, even though it tried to rally. The Euro failed to break above my key pivot point on a number of occasions. The next key pivot point on the downside is 1.3255. For a sell signal to be generated, the Euro’s daily high has to be below that pivot point.
S&P 500 E mini:
The March S&P 500 E mini closed 10.00 points higher on a higher than normal volume of
1,985,966 contracts. Open interest increased by 24,696 contracts. I continue to believe that the major indices are in a topping process, and therefore it is imperative to have long put protection in place.
10 Year Treasury Notes:
March 10 year treasury notes closed 13 1/2 points lower on relatively light volume of 1,471,382 contracts. Open interest declined by 23,368 contracts. The notes market is exhibiting all the indications of a market that wants to go higher. Volume and open interest is declining as price declines. This is bullish. The low of 130-10 was four ticks below the low of February 23, but despite this, volume decreased substantially from the previous day of 2,000,555 contracts. Although the note market looks bullish, I am unable to calibrate how much more upside the market has to go. My opinion is to stand aside. Do not short this market.