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Corn:

March corn advanced 4.50 cents on heavy volume of 403,110 contracts. Volume was the strongest since November 25 when the March contract gained 3.25 cents on volume of 425,145 contracts and total open interest declined by 17,318. On December 17, total open interest increased by 4,184 contracts, which relative to volume is approximately 50% below average. However, the March contract lost 4,864 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in March and increase total open interest.

Yesterday, March corn made a new contract low of 3.62 1/2, and then rallied to close higher on the day. Though, it appeared likely in the early going the downtrend would resume due to the new contract low and that the daily high was below OIA’s pivot point of 3.73, new buying came in to send the market above the pivot point.

As this report is being compiled on December 18, the March contract is trading 4.50 cents higher and has made a daily high of  3.79 1/2, which is the highest print since 3.79 1/2 made on December 15. March corn remains on short and intermediate term sell signals. We have no recommendation.

Soybeans:

January soybeans advanced 14.50 on heavier volume of 347,038 contracts. Volume exceeded that of December 16 when the January contract lost 4.50 cents on volume of 308,986 and total open interest increased by 2,634. On December 17, total open interest increased by 1,724 contracts, which relative to volume is approximately 75% below average, but a total open interest increase on yesterday’s advance is positive, although the number itself is disappointing.

However, as a mitigating factor, the January contract lost 15,817 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in January and increase total open interest. Yesterday, it appeared likely that January soybeans would generate a short-term sell signal because for most of the session it was trading below OIA’s key pivot point of 8.68 7/8. However, new buying came in to send the market to a daily high of 8.78 1/4, substantially above the pivot point.

As this report is being compiled on December 18, the January contract is trading sharply higher, up 12.75 cents, or + 1.45%. The January contract remains on a short-term buy signal, but an intermediate term sell signal. We have no recommendation.

Coffee: On December 17, March New York coffee generated a short-term sell signal, which reversed the short-term buy signal of December 9. March coffee remains on an intermediate term sell signal.

WTI crude oil:

January WTI crude oil lost 57 cents on surprisingly light volume of 722,783 contracts. Volume was the weakest since December 1 when crude oil gained 20 cents on volume of 656,516 contracts and total open interest increased by 9,663. On December 17, total open interest declined by 9,906 contracts, which relative to volume is approximately 45% below average. The January contract accounted for loss of 25,920 of open interest. As this report is being compiled on December 18, the February contract is trading unchanged on the day. February WTI remains on short and intermediate term sell signals. We have no recommendation.

Dollar index: On December 17, the March dollar index generated a short-term buy signal, which reversed the December 14 short-term sell signal. The March contract remains on intermediate term buy signal.

March dollar index advanced by a very strong 1.436 points on surprisingly light volume of 31,133 contracts. Volume was substantially below that of December 16 when the March contract lost 40.4 points on volume of 47,566 contracts and total open interest declined by 188. On December 17, total open interest increased substantially, up 1,042 contracts, which relative to volume is approximately 20% above average.

As this report is being compiled on December 18, the March contract is pulling back by 42 points, which is typical after the generation of a buy signal, and the index could see another day or two of corrective activity before resuming the uptrend. The March contract remains on short and intermediate term buy signals. No recommendation.

Euro: On December 17, the March euro generated a short-term sell signal, which reversed the December 14 short-term buy signal. The March euro remains on an intermediate term sell signal.

The March euro lost 1.78 cents on volume of 226,617 contracts. Total open interest increased by 3,432 contracts, which relative to volume is approximately 40% below average. As this report is being compiled on December 18, the March euro is having a typical counter trend rally after the generation of a sell signal and this could carry-on through Monday, possibly Tuesday. The March euro remains on short and intermediate term sell signals. We have no recommendation.

CHFEUR: The CHFEUR cross will generate short and intermediate term buy signals on December 18. No recommendation.

Yen: On December 17, the March yen generated a short-term sell signal, which reversed the December 14 short-term buy signal. The March and remains on an intermediate term sell signal.

The March yen lost 74 pips on volume of 125,225 contracts. Total open interest exploded higher, up 14,154 contracts, which relative to volume is approximately 360% above average meaning huge numbers of new short-sellers were entering the market and driving prices lower .8154.

As this report is being compiled on December 18, the March yen has dramatically reversed course and is trading 99 pips above yesterday’s close or + 1.22%. In the early going overnight, the March contract made a low of .8057, which is the lowest print since .8055 made on August 20 and has made a daily high of .8278, or a daily range of 221 pips or $2762.50.

OIA is one of the rare analysts who is more bullish on the yen than bearish. One important data point: The 50, 100 and 200 day moving averages are converging: 50 day, .8238, 100 day, .8251, 200 day, .8264. The current price for the March contract is .8256, within the band of the three moving average prices. For the March contract to generate a short-term buy signal, the low of the day must be above OIA’s key pivot point for December 18 of .8256. No recommendation.

S&P 500 E-mini:

The March S&P 500 E-mini lost 39.00 points on volume of 2,524,799 contracts. Volume shrank from December 16 when the March contract gained 26.75 points on volume of 2,611,893 contracts and total open interest declined by 5,227. On December 17, total open interest increased by 10,535 contracts, which relative to volume is approximately 80% below average. However, the December contract lost 66,650 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in December and increase total open interest.

As this report is being compiled on December 18, the March contract is trading 21.25 points lower and is made a daily low of 2002.50, which is the lowest print since 1983.25 made on December 14. On December 11, OIA announced the March contract generated a short-term sell signal, but remains on an intermediate term buy signal. It appears likely that an intermediate term sell signal will be generated sometime next week. This will occur if the daily low is below OIA’s key pivot point for December 18 of 1985.20.

In the November 30 report, OIA recommended the initiation of short call positions in the December 2015 S&P 500 E-mini and this was a profitable trade from the beginning. The contract expires today. At this juncture, we have no recommendation.