May corn closed 3 1/4 cents lower on volume of 282,851 contracts. Open interest increased by 7,216 contracts. The market made a new low for the move at 631 3/4, which was the lowest price since February 22 when the market reached 630. This is the second day in a row that open interest has increased on declining prices, which is bearish. It is important to note that on March 8, the dollar index declined, which provided a boost to equities and many commodities, but it did not help corn. At this juncture, it is best to stand aside and let the market find a bottom.
May soybeans closed 11 3/4 cents higher on relatively light volume of 181,202 contracts. Open interest increased by 6,310 contracts. The market is overbought and all speculators should be out of their long positions.
May sugar closed 4 points higher on light volume of 91,459 contracts. Open interest declined by 4,958 contracts. The market has not been acting well since February 28. The key pivot point for May sugar is 23.57. If the market closes under this number and the daily high does not exceed 23.57, a sell signal will be generated. Stand aside.
April crude oil closed up $.42 per barrel on volume of 705,749 contracts. Open interest declined 13,214 contracts, which is negative open interest action on a price rise. The volume on March 8 was the lowest since March 5 when volume was 511,740 contracts. The market was trading in an environment when the dollar was sharply lower, which is bullish for crude, and the equities market was rallying, along with many commodities including the precious metals. The market looks a bit tired up at these levels and I suggest that speculators stand aside.
April gasoline closed 2.66 cents per gallon higher on volume of 153,042 contracts. Open interest declined by 497 contracts. The market’s high for the day was 3.3295 (per gallon) which was the highest price since March 2, when the market rallied to 3.334. The high for gasoline occurred on the previous day (March 1) when it reached 3.3868. Continue to stand aside and wait for lower prices.
April gold closed $14.80 higher on volume of 194,459 contracts. Open interest increased by
3,803 contracts. The market is trading in a value zone bounded by the recent low that it made on March 6 of 1663.40, and its key 50, 150, 200 day moving averages of 1692.23, 1715.70, 1675.86 respectively. On my suggestion, speculators should have been stopped out at 1688.40. If entering long positions, the March 6 low of 1663.40 should be used as a stop loss point.
May silver closed $.24 higher on very light volume of 43,438 contracts. Open interest declined by 347 contracts. It was disappointing that the market couldn’t find the strength to rally more than it did considering the magnitude of the decline in the dollar index. Stand aside.
The March Euro rallied sharply and closed 1.24 cents higher on heavier than usual volume of 310,157 contracts. Consistent with its bear market status, open interest declined 2,686 contracts. The volume was the highest since February 29 when the euro closed 1.19 cents lower on volume of 351,274 contracts. The rally was based upon a resolution of the Greek debt crisis. As I’m writing this on March 9, the Euro has completely reversed and is down sharply. The trading range for March 8 was 1.56 cents, which is above the 21 day average true range of 1.21 cents. A couple of days ago, I suggested that long puts and/or, short calls, and/or outright short positions be implemented. Additionally, I suggested that the pivot point of of 1.3254 be used to enter buy stops on short positions, and as a benchmark to liquidate option positions. I will continue to monitor the Euro to determine when to re-enter the market on the short side.
S&P 500 E mini:
The March S&P 500 E mini closed 13.75 points higher on extremely heavy volume of 2,749,782 contracts. Open interest increased by 28,734 contracts. The volume on March 8 was the highest since December 14, 2011 when the number of contracts traded was 3,449,392 contracts. I continue to believe that the market is in a topping process and that long put protection should be in place.