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Corn:

March corn advanced 5.00 cents on heavy volume of 488,576 contracts. Total open interest declined by 4,652 contracts, which relative to volume is approximately 50% below average. The March contract accounted for loss of 15,471 of open interest. As this report is being compiled on January 13, the March contract is trading 1.25 cents higher and has not taken out yesterday’s high of 3.63 3/4. March corn remains on short and intermediate term sell signals.

Soybeans:

March soybeans gained 13.25 cents on heavy volume of 316,321 contracts. Total open interest exploded higher up by 9,206, which relative to volume is approximately 5% above average. The January and July 2016 contracts lost a total of 3,458 of open interest, which means there were more than enough open interest increases in the forward months to offset the decline in the two delivery months and increase total open interest above average. Yesterday’s performance was impressive

As this report is being compiled on January 13, the March contract is trading 3.50 cents higher, but has not taken out yesterday’s print of 8.81 1/4. 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 January 13 of 8.80 5/8. March soybeans remain on short and intermediate term sell signals.

Soybean meal:

March soybean meal advanced $5.70 on heavy volume of 121,759 contracts. Total open interest declined by 2,819 contracts, which relative to volume is approximately 10% below average, however a total open interest decline on yesterday’s advance is bearish. The January and March contracts lost a total of 4,085 of open interest and there were insufficient open interest increases in the forward months to offset the decline in the two delivery months. Yesterday soybeans was the leader.

As this report is being compiled on January 13, the March contract is trading $1.10 lower and has made a daily high of 276.50, which is below yesterday’s print of 277.20. 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 January 13 of $276.10. We have no recommendation.

Sugar: On January 12, March sugar generated an intermediate term sell signal after generating a short-term sell signal on January 6.

March sugar lost 10 points on volume of 164,360 contracts. Total open interest declined by 2,933 contracts, which relative to volume is approximately 25% below average. As this report is being compiled on January 13, the March contract is trading 36 points higher. We have no recommendation.

WTI crude oil:

February WTI crude oil lost 97 cents on heavy volume of 1,208,168 contracts. Total open interest increased by 8,646 contracts, which relative to volume is approximately 65% below average, however an open interest increase on yesterday’s decline is bearish. The February contract lost 45,907 of open interest, which means there was more than enough open interest increases in the forward months to offset the decline in February and increase total open interest.

As this report is being compiled on January 13, the February contract is trading nearly unchanged on the day and has made a daily low of $30.10, which is above yesterday’s contract low of 29.93. The market is experiencing an extreme amount of bearishness with predictions of crude at $10.00-20.00. As we have said in prior reports, clients should be standing aside in this market.

The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.2 million barrels from the previous week. At 482.6 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 8.4 million barrels last week, and are above the upper limit of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories increased by 6.1 million barrels last week and are above the upper limit of the average range for this time of year. Propane/propylene inventories fell 4.5 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories increased by 10.0 million barrels last week.

Dollar index:

The March dollar index advanced 24 points on volume of 27,573 contracts. Total open interest increased by 673 contracts, which relative to volume is average. Yesterday’s performance from the price and open interest standpoint was the most positive of the past couple of sessions.

Interestingly, the dollar index has been unable to take out its mid March 2015 high despite all the talk of the bullish dollar index.  As this report is being compiled on January 13, the dollar index is trading nearly unchanged. The problem hindering the index’s advance is that the euro, which comprises approximately 58% of the movement in the dollar index has not broken down as many have expected. The March dollar index remains on short and intermediate term buy signals. We have no recommendation.

S&P 500 E-mini:

The S&P 500 E-mini advanced 10.75 points on volume of 2,431,563 contracts. Total open interest increased by 11,685 contracts, which relative to volume is approximately 75% below average. The performance on January 12 was the most positive we have seen during the past several days. However, on January 13, the market has reversed course and trading 11.75 points lower on the day and made a daily low of 1909.25, which is above yesterday’s print of 1899.00.

The market is massively oversold and over due for rally. There was an attempt in the early going on January 13 when the March contract made a high of 1946.50, which is slightly above yesterday’s print of 1940.25. However, it appears that potential market participants are not inclined to step in to the market and aggressively buy equities, which could be the foundation of a temporary rally.

Our concern is that the market is about to make another leg lower and test the August 24 low. On December 30, we recommended the initiation of short call positions in the January S&P 500 E-mini and the trade has been profitable from the start. Clients should hold it into January 15 expiration.