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Corn:

March corn advanced 0.50 cents on volume of 170,900 contracts. Total open interest declined by 4,815 contracts, which relative to volume is average.The December contract lost 1,524 of open interest, March -920, May -1,114 and July -2,349. As this report is being compiled on December 9, the March contract is trading nearly unchanged after making a daily high of 3.79 1/4, which is the highest print since 3.82 made on December 7.

The market has been struggling and as yet has been unable to generate a short-term buy signal. This will occur if the daily low is above OIA’s key pivot point for December 9 of 3.79. The downtrend will resume if the daily high is below OIA’s pivot point of 3.73 3/8. March corn remains on short and intermediate term sell signals. We have no recommendation.

Soybeans:

January soybeans lost 5.25 cents on volume of 278,174 contracts. Total open interest declined just 8 contracts. The January contract accounted for loss of 15,992 of open interest, which means there were sufficient open interest increases in the forward months to offset almost all the decline in January. We consider yesterday’s price and open interest action as bearish.

As this report is being compiled on December 9, the January contract is trading 3.50 cents lower and has made a daily low of 8.73, which is above yesterday’s print of 8.72 3/4. For the January contract to generate a short-term sell signal, which would reverse the short-term buy signal, the high of the day must be below OIA’s key pivot point for December 9 of 8.69 3/4. We have no recommendation.

Soybean oil:

December soybean oil advanced 24 points on volume of 181,166 contracts. Total open interest declined by 3,533 contracts, which relative to volume is approximately 20% below average. The December contract accounted for loss of 387 of open interest, January 2016 -8,084. As this report is being compiled on December 9, the January contract is trading 27 points lower and has made a daily low of 31.09, which is above yesterday’s print of 30.80. January soybean oil remains on short and intermediate term buy signals. We have no recommendation.

Coffee: March coffee will generate a short-term buy signal on December 9.

WTI crude oil:

January WTI crude oil lost 14 cents on record-breaking volume of 1,595,710 contracts. Volume traded on December 8 was the highest of 2015. On December 8, total open interest declined by 10,197 contracts, which relative to volume is approximately 60% below average. However, the January contract lost 82,195 of open interest, which means there were sufficient open interest increases in the forward months to offset most of the decline in January. The price and open interest action of December 8 was clearly bearish. This is consistent with the past several days of a bearish open interest action on price advances and declines.

The January contract made a new contract low $36.64 on December 8 and the low thus far in trading on December 9 has been 36.87 while the January contract is trading 55 cents lower after making a spike high of $38.99 on heavy volume after the release of the EIA report.

Today’s high is fractionally lower than the December 7 print of 40.15. There are rumors that a very large hedge fund that specializes in trading oil may be in trouble and the massive long position is likely to send prices still lower. Do not attempt to pick a bottom in this market. OIA will advise when a buy signal is generated.

The Energy Information Administration announced on December 9 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.6 million barrels from the previous week. At 485.9 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years. Total motor gasoline inventories increased by 0.8 million barrels last week, and are in the upper half the upper half of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories increased by 5.0 million barrels last week and are in the upper half of the average range for this time of year. Propane/propylene inventories fell 3.4 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories decreased by 3.6 million barrels last week.

Dollar index:

The December dollar index lost 20.1 points on volume of 37,145 contracts. Total open interest increased by 1,288 contracts, which relative to volume is approximately 20% above average. The December contract lost 6,017 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 above average.

As this report is being compiled on December 9, the December contract is trading sharply lower, down 93.8 points and has made a daily high of 98.510. For the December contract to generate a short-term sell signal, the daily high must be below OIA’s key pivot point for December 9 of 97.871. The rally will resume if the daily low is above OIA’s pivot point for December 9 of 98.569. We have no recommendation.

Euro:

The December euro advanced 42 pips on volume of 313,063 contracts. Total open interest exploded higher, up by 22,408 contracts, which relative to volume is approximately 185% above average meaning that aggressive new buyers were entering the market in large numbers and driving prices higher (1.0904).The December contract lost 33,233 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 by a very large amount. The action in yesterday’s trading was bullish.

As this report is being compiled on December 9, the December contract is trading sharply higher on very heavy volume and has made a new high for the move of 1.1008. In yesterday’s report, we warned clients that it was possible for the euro to continue its advance, especially because professional money managers are heavily net short.

For the December euro to generate a short-term buy signal, the low of the day must be above OIA’s key pivot point for December 9 of 1.0942. We think there will be a terrific opportunity on the bearish side of the euro, but we want to see large numbers of short-sellers get blown out of the market.

S&P 500 E-mini:

The S&P 500 E-mini declined 22.25 points on volume of 2,167,124 contracts. Total open interest increased by a massive 51,818 contracts, which relative to volume is approximately 10% below average, but the December contract lost 18,251 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 substantially. 

 In prior reports, OIA has under scored the fact that total open interest action relative to price advances and declines have been bearish. This negative pattern has been in evidence every single day since December 2. 

As this report is being compiled on December 9, the December contract is trading sharply lower, down 17.50 points and has made a daily low of 2034.25, which takes out the previous low print of 2040.00 made on December 3. 

For the December contract to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for December 9 of 2061.65. In the November 30 report, written on December 1, we recommended short call positions in the December 2015 contract of the S&P 500 E-mini. This trade has worked well for everyone who put it on. Continue to hold the position until the expiration of the December contract on December 18.