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Soybeans:

March soybeans advanced 5.50 cents on volume of 180,590 contracts. Total open interest declined by 3,023 contracts, which relative to volume is approximately 35% below average. The January and March contract lost a total of 7,472 of open interest, which means there were insufficient open interest increases in the forward months to offset the decline in the two delivery months.

Although total open interest action on January 12 was very positive when the March contract gained 13.25 cents on volume of 316,321 contracts and total open interest increased by a massive 9206, the reaction when beans advanced on January 13 was liquidation.

On January 13, the March contract made a high of 8.80 3/4, which was below the January 12 print of 8.81 1/4 indicating there was no follow-through on the upside. As this report is being compiled on January 14, the March contract is trading nearly unchanged and has made a daily high of 8.81 1/2.

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 14 of 8.80 5/8 and the low thus far on January 14 has been 8.74 3/4. March soybeans remain on short and intermediate term sell signals.

Sugar: March New York sugar will generate a short-term buy signal if the daily low is above OIA’s key pivot point for January 14 of 14.99. The March contract remains on short and intermediate term sell signals.

Live cattle: February live cattle will generate a short-term sell signal if the daily high is below OIA’s key pivot point for January 14 of 1.30315. The February contract remains on an intermediate term sell signal.

WTI crude oil:

February WTI crude oil advanced 4 cents on huge volume of 1,374,769 contracts. Yesterday, was the biggest volume day during the carnage that has occurred over the past couple of weeks. On January 13, total open interest declined by 28,542 contracts, which relative to volume is approximately 20% below average. The February contract accounted for loss of 61,424 of open interest.

As this report is being compiled on January 14, the February contract is in a rally mode, up 82 cents and has made a daily high of 31.77, which is only slightly above yesterday’s print of 31.71. We continue to advise a stand aside posture. Do not attempt to pick a bottom.

Natural gas: February natural gas will generate a short-term sell signal if the daily high is below OIA’s key pivot point for January 14 of $2.156. A short-term sell signal would reverse the December 29 short term buy signal. February natural gas remains on an intermediate term sell signal.

Euro:

The March euro advanced 22 pips on volume of 180,112 contracts. Total open interest increased by 2,445 contracts, which relative to volume is approximately 45% below average. As this report is being compiled on January 14, the euro is trading 16 pips lower after making a daily high of 1.0959, which is the highest print since 1.0987 made on January 11.

The euro has pulled back as equity indices rally, but we remain concerned the euro could have a sharp rally in the event of an equity market meltdown, which we think is a possibility. 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 14 of 1.0975. For the downtrend to resume, the high of the day must be below OIA’s key pivot point for January 14 of 1.0860. At this juncture, we have no recommendation.

Yen:

The March yen lost 12 pips on volume of 150,121 contracts. Total open interest increased by 5,351 contracts, which relative to volume is approximately 20% above average. As this report is being compiled on January 14, the March contract is pulling back by 30 pips as the equity market rallies.

On December 21, OIA announced that the March contract generated a short-term buy signal and an intermediate term buy signal on December 29. Since then, the market has rallied sharply to a high of .8573 on January 11 and has been trading in a consolidating corrective mode ever since. We think there is more downside left in the yen, especially if the oversold equity market continues to rally. We have advised a stand aside posture for those contemplating new bullish positions and reiterate this stance.

In the spot yen market, the 50 day moving average has crossed above the 200 day, however the 100 day moving average remains above the 50 and 200 day moving averages. In the futures market, the March contract 50 day moving average has not crossed above the 200 or 100 day moving averages. However, the fact that the spot yen has made a golden moving average cross is positive. We are looking for a correction to the .8300 level, which should serve to blow-out some of the new speculative longs.

Gold: The February gold contract will generate a short-term sell signal, if the daily high is below OIA’s key pivot point for January 14 of $1070.50. If this were to occur, the January 7 short-term buy signal would be reversed. February and April gold remain on intermediate term sell signals. Additionally, March silver has been unable to generate a short-term buy signal and the entire complex looks abysmal.

10 Year Treasury Note: The March 10 year note will generate an intermediate term buy signal if the low of the day remains above OIA’s key pivot point for January 14 of 127-192. The March note generated a short-term buy signal on January 6.

The March 10 year treasury note gained 7.5 points on heavy volume of 1,704,989 contracts. Total open interest increased by a sizable 57,524 contracts, which relative to volume is approximately 20% above average meaning aggressive new buyers were entering the market in substantial numbers and driving prices to a new high for the move (128-085). As this report is being compiled on January 14, the March note is pulling back as the equity market rallies, and has been unable to take out yesterday’s print. We have no recommendation.

S&P 500 E-mini:

The March S&P 500 E-mini lost 43.50 points on heavy volume of 2,904,835 contracts. Volume was the strongest since January 7 when the March contract lost 53.00 points on volume of 2,979,804 and total open interest increased by 32,363. On January 13, total open interest increased by 40,723 contracts, which relative to volume is approximately 40% below average, but an open interest increase in yesterday’s sharp decline indicates that new short-sellers were piling into the market.

Unfortunately for them it appears they were piling in at the bottom of the range as the March contract is trading 35.00 points higher on January 14 and has made a daily high of 1918.00, which is below the January 13 print of 1946.50. On January 14 after the cash market opened, the March contract made a low of 1871.00, which is below the January 13 print of 1878.00 and has rallied strongly after making the low.

The market is massively oversold and has been overdue for a strong rally. We will await more market action before deciding whether new positions are warranted. Maintain the short call position in the January 2016 S&P 500 Emini contract originally recommended on December 30 and hold it into January 15 expiration.