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Corn: March corn will generate a short-term sell signal on February 8 provided the daily high is below OIA’s key pivot point for February 9 of 3.63 1/8.

March corn lost 3.50 cents on volume of 405,296 contracts. Total open interest increased by 6,461 contracts, which relative to volume is approximately 40% below average. However, the March contract lost 38,759 of open interest, which means there were sufficient open interest increases in the forward months to offset the large decline in the March contract and increase total open interest. Yesterday’s price and open interest action was decidedly bearish.

As this report is being compiled on February 9, the March contract is trading 1.75 cents lower and has made a daily low of 3.59 1/4, which is the lowest print since 3.56 made on January 15. We have no recommendation.

Soybeans: On February 8, March soybeans generated a short-term sell signal, and remains on an intermediate term sell signal. This reverses the January 19 short-term buy signal.

March soybeans lost 5.00 cents on volume of 195,302 contracts. Total open interest increased by 5,997 contracts, which relative to volume is approximately 5% above average. The March contract accounted for loss of 8,280 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 slightly above average.

As this report is being compiled on February 9, the March contract is trading 2.00 cents lower and has made a daily low of 8.60, which is the lowest print since 8.57 1/4 made on January 12. We have no recommendation.

Live cattle: April live cattle will generate a short-term sell signal on February 9 if the daily high remains below OIA’s key pivot point for February 9 of 1. 32660. This will reverse the short-term buy signal of February 4.

April live cattle lost the 3.00 cent daily limit on volume of 50,907 contracts. Total open interest increased by 1,137 contracts, which relative to volume is approximately 10% below average, but an open interest increase on yesterday’s major price decline is clearly bearish. The February contract lost 2,416 of open interest, which means there were more than enough open interest increases in the forward months to offset the decline in February and increase total open interest.

We are a bit surprised to see the short-term buy signal reversed so quickly and though we thought the market had the ability to work its way higher, we also cautioned a new bull market was not beginning. As this report is being compiled on February 9, the April contract is trading close to unchanged, but has made a daily low of 1.30400, which is slightly above the January 22 print of 1.30300. We have no recommendation.

WTI crude oil:

March WTI crude oil lost $1.20 on volume of 1,321,735 contracts. Total open interest declined by 35,729 contracts, which relative to volume is average, but this is a substantial number. The March contract accounted for loss of 78,968 of open interest.

As this report is being compiled on February 9, the March contract is trading sharply lower again, down $1.27 or -4.28%. Additionally, March gasoline is making a new contract low and has taken out the January 2009 low of 96.69. The next major low to be tested for gasoline occurred in the month of December 2008 at the height of financial crisis when the January contract made a multiyear low of 78.50. It appears that the short term buy signal in heating oil of February 8 will be reversed in tomorrow’s trading. The March WTI contract is headed to test the January 20 low of $27.56. We have no recommendation.

Gold:

April gold advanced $40.20 on heavy volume of 267,793 contracts. Total open interest exploded higher, up by 16,532, which relative to volume is approximately 140% above average meaning huge numbers of new buyers were entering the market and aggressively bidding prices higher as gold made a new high for the move of $1201.40, which is the highest print since $1191.90 made on October 15, 2015.

As this report is being compiled on February 9, the April contract has not taken out yesterday’s high and is trading near unchanged on the day. We have no recommendation except to say gold is overbought and clients should wait for setback before considering new bullish positions. April gold remains on short and intermediate term buy signals.

Silver:

March silver advanced by a strong 64.8 cents on heavy volume of 84,688 contracts. Total open interest increased by 1,933 contracts, which relative to volume is approximately 10% below average, but an open interest increase on yesterday’s price advance is positive. We would have preferred a larger increase based upon the size of the move.

As this report is being compiled on February 9, the March contract has not taken out yesterday’s print of $15.480, which is the highest price since 15.49 made on November 3. We have no recommendation except to say the market is overbought and new bullish positions should NOT be entered at current prices. Wait for a setback. March silver remains on short and intermediate term buy signals.

Euro:

The March euro advanced 67 pips on volume of 217,022 contracts. Surprisingly, total open interest increased just 43 contracts. However, the March contract lost 2,243 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 fractionally.

As this report is being compiled on February 9, the March contract is trading sharply higher, up 95 pips and has made a new high for the move of 1.1348, which is the highest print since 1.1378 made on October 22. On February 4, the March euro generated short and intermediate term buy signals. We have no recommendation.

Yen:

The March yen advanced by a strong 114 pips on volume of 226,770 contracts. Total open interest increased by 3,279 contracts, which relative to volume is approximately 40% below average. Apparently, potential market participants were unwilling to jump into the yen trade on yesterday’s strong advance, which explains the below average open interest increase.

As this report is being compiled on February 9, the March contract is trading higher again, up 41 pips and has made a new contract high of .8764, which is the highest print since .8784 made during the week of November 10, 2014. On February 4, the March yen generated short and intermediate term buy signals. We recommend a stand aside posture due to the high volatility and the potential to lose money on either side of the trade.

S&P 500 E-mini:

The March S&P 500 E-mini lost 23.25 points on volume of 2,682,474 contracts. Total open interest increased by 19,438 contracts, which relative to volume is approximately 60% below average, however an open interest increase on yesterday’s decline confirms the bearish trend of the market.

As this report is being compiled on February 9, the March contract is trading lower again, down 19.50 points and has made a daily low of 1825.75, which is above yesterday’s print of 1821.75. We think a test of the January 20 low of 1804.25 is inevitable, and it is likely this will be taken out. As we pointed out before, the E-mini should only be traded using options and clients should NOT sell naked puts on the S&P 500 E-mini. We prefer the use of long puts, or long calls.