For Bloomberg access:{OIAR<GO>}

Soybean oil:

July soybean oil advanced 25 points on heavy volume of 149,200 contracts. Volume with the strongest since June 1 when the July contract gained 1.18 cents on volume of 174,447 contracts. On June 5, total open interest increased by 5,048 contracts., which relative to volume is approximately 15% above average meaning that aggressive new buyers were entering the market and driving prices to a new high for the move of 35.29, which is the highest print since 35.66 made on November 3, 2014.

As this report is being compiled on June 8, July soybean oil is under going its first major pullback of the past two weeks and trading 66 points lower on the day. The market is massively overbought and has experienced massive increases of open interest on the advance, and for today’s trading, open interest should decline.

Chicago wheat:

July Chicago wheat lost 6.75 cents on extraordinarily volume of 264,195 contracts.Volume was the strongest of 2015 and was the highest recorded since November 12, 2014 when 290,899 contracts were traded and the July 2015 contract closed at 5.60 1/2. On June 5, total open interest declined by 4,097 contracts, which relative to volume is approximately 40% below average, but an open interest decline on Friday’s lower close is positive. The July contract accounted for loss of 18,998, which means there were sufficient open interesting creases in the forward months to reduce total open interest below average. For past three sessions beginning on June 3, open interest action relative to price has been positive.

On Friday, the July contract made a new high for the move of 5.34 and as this report is being compiled on June 8 has made daily high slightly below this of 5.32 3/4. On May 15, the July contract generated short-term buy signal, but has been unable to generate an intermediate term buy signal. The recent history of the market has been it rallies to the high 520-low 530 area, then sells-off. If the market can close at the upper end of its recent trading range, another leg higher is likely in the offing.

Live cattle:

August live cattle lost 87.5 points on volume of 58,172 contracts. Total open interest declined by a massive 9,662 contracts, which relative to volume is approximately an astounding 450% above average, which means liquidation was off the charts heavy. Liquidation was in the front months with the June contract losing 8,589 of open interest, August -1,118, October 2015 -984.

The open interest action on June 5 has all the earmarks of tired longs throwing in the towel. As this report is being compiled on June 8, the August contract is trading slightly above Friday’s close and has made a new low for the move of 1.5o100, which takes out Friday’s low of 1.50250.For the rally to resume in earnest, the August contract must make a low above OIA’s key pivot point for June 8 of 1.51900, and the decline will accelerate if the August contract makes a daily high below OIA’s key pivot point for June 8 of 1.50390.We advise a stand aside posture.

Lean hogs:

August lean hogs advanced 1.20 cents on volume of 56,104 contracts. Total open interest declined by 626 contracts, which relative to volume is approximately 50% below average. The June contract lost 2,459 of open interest, July -3,085. There were sufficient open interest increases in the forward months to reduce total open interest below average. Regardless, the total open interest decline on Fridays advance is bearish and confirms the downtrend.

As this report is being compiled on June 8, the August contract is trading unchanged. On June 4, the August contract generated a short-term sell signal and it appears likely that the market is headed toward an intermediate term sell signal. Our recommendation: sell rallies.

WTI crude oil:

July WTI crude oil advanced $1.13 on heavy volume of 919,382 contracts. Volume was the strongest since April 16 when 1,029,520 contracts were traded and the July 2015 contract closed at $59.23. On June 5, total open interest declined by 8,747 contracts, which relative to volume is approximately 50% below average. The July contract lost 35,332 of open interest and there were sufficient open interest increases in the forward months to reduce total open interest below average.

However, the total open interest decline on Friday’s advance is bearish and confirms the downtrend. Despite the reversal action in Friday’s’s trading from the low of 56.83, it is not holding up on June 8 as the July contract is trading $1.23 lower and near the lows of the day. On May 20, the July contract generated a short term sell signal, but remains on an intermediate-term buy signal.

Brent crude oil:

July Brent crude oil advanced $1.28 on volume of 742,613 contracts. Total open interest increased by 13,248 contracts, which relative to volume is approximately 25% below average, however the July contract lost 17,322 open interest, which makes the total open interest increase more impressive (bullish). Note the difference in volume traded between Brent and WTI and the complete opposite action of  total open interest. On May 20, July Brent crude oil generated a short-term sell signal, but remains on intermediate-term buy signal.

Gold: This will be our last report on gold until we announce a signal change, or see a trading opportunity.

August gold lost $7.10 on volume of 162,967 contracts. Total open interest increased by 2,294 contracts, which relative to volume is approximately 40% below average, but an open interest increase on Friday’s decline is bearish The June contract lost 166 of open interest, October 2015 -306, which makes the total open interest increase more impressive (bearish). June 5 was the third day in a row in which August gold declined and total open interest increased. This confirms the downtrend. On May 27, August gold generated an intermediate-term sell signal and a short-term sell signal on June 3.

Silver: On June 5, July silver generated short and intermediate term sell signals.

This will be our last report on silver until we announce a signal change or see a trading opportunity.

July silver lost 11.9 cents on volume of 72,865 contracts. Total open interest increased by 1,328 contracts, which relative to volume is approximately 25% below average, however the July contract lost 2,638 of open interest, which makes the total open interest increase more impressive (bearish). For the past three days beginning on June 3, July silver has declined and total open interest has increased each day. This confirms the downtrend. As this report is being compiled on June 8, the July contract is trading 4.4 cents lower and has made a new low for the move of $15.880.

Dollar index:

The June dollar index advanced 86.8 points on heavy volume of 86,837 contracts. Volume was the strongest since June 2 when 96,166 contracts were traded and the June dollar index lost 1.595 points while total open interest increased by 133 contracts. On June 5, total open interest increased by just 107 contracts, which is dramatically below average and must be a disappointment to dollar bulls. The June contract lost 1,387 of open interest, which means there were sufficient open interest increases in the forward months to bring total open interest to a positive number, but an unimpressive number nonetheless.

As this report is being compiled on June 8, the June dollar index is trading 91.6 points lower and has made a new low for the move of 95.200, which is below Friday’s low print of 95.240. On June 4, the June and September dollar index generated intermediate term sell signals, but remains on short term buy signals.

Euro:

The June euro lost 1.26 cents on volume of 364,989 contracts. Total open interest increased by 3,738 contracts, which relative to volume is approximately 50% below average, but an open interest increase on a price decline is bearish. The June contract lost 2,557 of open interest, which makes the total open interest increase more impressive (bearish.

However, as clients of OIA know, the June and September euro generated a short and intermediate term buy signal on June 4 and as we pointed out in the June 4 report, we expected a pullback. This occurred on June 5 and on the opening of today’s session that began on Sunday. We think the rally continues and look for a test of the June 4 high of 1.1382, then 1.1472 made on May 15 basis the June contract. The large number of speculative shorts will add fuel to the upside move.

From the June 4 report:

“Now that the euro is on short and intermediate term buy signals, we are seeing the first day of a pullback on June 5, and would expect more corrective action before the euro begins to move higher again. Conceivably, the new buy signals may be false, but we will not know this until mid-week. However, the market is trading rather firmly, especially considering the magnitude of the move higher, yesterday’s minor loss and the relatively shallow decline on June 5. The euro is not acting as if the buy signal will be reversed immediately.”

British Pound:

The June British pound lost 93 pips on volume of 108,619 contracts. Total open interest increased by 3,047 contracts, which relative to volume is approximately 5% above average. The June contract lost 619 of open interest, which makes the total open interest increase more impressive (bearish). As this report is being compiled on June 8, the June pound is trading 62 pips higher and has made a daily high of 1.5342, which is below Friday’s high of 1.5377. On June 1 the June and September British pound generated short term sell signals, but remain on intermediate term buy signals.

S&P 500 E mini: The June and September S&P 500 E mini contracts will generate short term sell signals on June 8.

On June 5, the S&P 500, Dow Jones Industrial Average and the New York Composite cash indices generated short-term sell signals.

The June S&P 500 E mini lost 6.75 points on volume of 1,487,284 contracts. Total open interest declined by 683 contracts, which is minuscule and dramatically below-average. The June contract lost 8,117 of open interest. As this report is being compiled on June 8 the E mini is trading 12.25 points lower and has made a daily high of 2093.25, which is below OIA’s key pivot point for June 8. Please review the June 7 weekend report for our ideas on how to position portfolios for the current decline