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Soybean oil: March soybean oil will generate short and intermediate term sell signals on January 11.

March soybean oil advanced 2 points on volume of 82,541 contracts. Total open interest increased by 4,721 contracts, which relative to volume is approximately 130% above average meaning a battle ensued between buyers and sellers and buyers were able to edge the market slightly higher. As this report is being compiled on January 11, the March contract is trading 39 points lower and has made a new low for the move of 29.20. We have no recommendation.

Copper: On January 8, March copper generated a short-term sell signal, and remains on an intermediate term sell signal.

March copper closed unchanged on volume of 71,718 contracts. Total open interest increased by 1,517 contracts, which relative to volume is approximately 20% below average. As this report is being compiled on January 11, the March contract is trading sharply lower, down 5.15 cents or -2.57% and has made a new contract low of 1.9665. We have no recommendation.

WTI crude oil:

February WTI crude oil lost 11 cents on heavy volume of 1,185,017 contracts. Volume exceeded that of January 7 when the February contract lost 70 cents on volume of 1,114,369 contracts and total open interest declined by 4,753. On January 8, total open interest declined again, this time by 5,122 contracts, which relative to volume is approximately 75% below average. However, the February contract accounted for loss of 66,612 open interest, which means there were sufficient open interest increases in the forward months to offset most of the decline in February. Clearly Friday’s action was bearish.

This continues on January 11: the February contract is trading $1.97 below Friday’s close or -5.94% and has made a new contract low of 31.10, which is the lowest price in over 12 years. The February Brent contract is trading $2.13 lower, or -6.35%. Heating oil is making new contract lows and trading -3.79% lower and February gasoline, trading -2.15 off Friday’s close and has made a new contract low as well. We have no recommendation except to say do not trade the market from the long or the short side. The crude oil market can rally at any time because it is deeply oversold.

Dollar index:

The March dollar index advanced 32.7 points on strong volume of 40,415 contracts. Total open interest declined by a massive 2,566 contracts, which relative to volume is approximately 150% above average meaning liquidation was extremely heavy on Friday’s advance. As this report is being compiled on January 11, the March contract is trading 7.6 points higher and has made a daily high of 98.920, which is substantially above OIA’s key pivot point for the generation of a sell signal of 98.128. We have no recommendation. The March dollar index remains on short and intermediate term buy signals.

Euro:

The March euro lost 32 pips on volume of 291,494 contracts. Total open interest declined by 3,511 contracts, which relative to volume is approximately 45% below average. As this report is being compiled on January 11, the March contract is trading 22 pips lower and has made a daily low of 1.0865, which is above Friday’s print of 1.0812 and has made a new high for the move of 1.09 87, which is the highest print since 1.1014 made on December 29.

Although the March contract remains on short and intermediate term sell signals, we are reluctant to recommend bearish positions at this particular time due to the fact that the euro has shown strength as US equities trade and trend lower. Our concern is that a sharp move to new lows in US equities could propel the euro substantially higher. For now, stand aside.

Yen:

The March yen lost 13 pips on volume of 241,286 contracts. Total open interest increased by 515 contracts, which is substantially below average. As this report is being compiled on January 11, the March contract is trading 21 pips above Friday’s close in response to lower equity prices. On December 21, OIA announced the March yen generated a short-term buy signal and an intermediate term buy signal on December 29.

The market is overbought, and for those contemplating new bullish positions, we recommend waiting for a sharp setback. The market is becoming a crowded trade with new buyers as open interest has been increasing steadily for the past several days indicating that new longs have rushed into the market at the upper end of the trading range.

S&P 500 E-mini:

The March S&P 500 E-mini lost 21.50 points on volume of 2,698,988 contracts. Volume declined from January 7 when the March contract lost 53.00 points on volume of 2,979,804 contracts and total open interest increased by 32,363. On January 8, total open interest increased by a sizable 69,566 contracts, which relative to volume is average.

As this report is being compiled on January 11, the March contract is trading 10.25 points lower and has made a new low for the move of 1893.50, which was made in the evening session on Sunday. On December 11, OIA announced that the March contract generated a short-term sell signal and an intermediate term sell signal on January 5. On December 30, OIA recommended short call positions in the January contract, and the trade continues to work well with premium collapsing as the underlying futures contract declines. Hold the position into January 15 expiration.