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Corn:

March corn advanced 3.25 cents on volume of 425,145 contracts. Total open interest declined by 17,318, which relative to volume is approximately 55% above average, and this was due to the 57,251 contract loss in the December contract and a decline of 535 contracts in the December 2016 contract. As this report is being compiled on a holiday shortened trading session, the March contract is trading 4.75 cents lower and has made a daily low of 3.67 1/4, which takes out Wednesday’s print of 3.69 1/4 and the 3.69 low of November 24. March corn remains on short and intermediate term sell signals. We have no recommendation.

Soybeans:

January soybeans advanced 11.50 cents on somewhat heavier volume of 175,079 contracts. Volume was the strongest since November 23 when the January contract gained 6.75 cents on volume of 233,308 contracts and total open interest increased by 4,658. On November 25, total open interest declined by 1,571 contracts, which relative to volume is approximately 45% below average, but the total open interest decline is negative. The January 2016 contract lost 5,118 of open interest, May 2016 -593. On November 25, the January contract made a high of 8.77 and this has been taken out slightly on November 27 with the new print of 8.77 3/4. Soybeans, soybean meal and soybean oil remain on short and intermediate term sell signals. We have no recommendation.

Cocoa:

March cocoa lost $34.00 on volume of 28,896 contracts. Volume was the strongest since November 13 when the March contract gained $35.00 on volume of 46,252 contracts and total open interest increased by 2,816 contracts. On November 25, total open interest declined by 1,480 contracts, which relative to volume is approximately 105% above average. The March contract lost 2,570 of open interest.

The total open interest decline on November 25 was the first since November 11 when cocoa advanced 39.00 volume of 47,022 contracts and total open interest declined by 478. It appears speculators began to throw in the towel after rushing into the market for the past couple of weeks. As this report is being compiled on November 27, the March contract is trading 4.00 lower. We have no recommendation at this juncture.

WTI crude oil:

The January WTI crude oil advanced 17 cents on volume of 600,723 contracts. Total open interest increased by 10,429 contracts, which relative to volume is approximately 25% below average. The January contract accounted for a gain of 187 contracts. As this report is being compiled on November 27, the January contract is trading sharply lower, down $1.11 or -2.58%. January WTI crude oil remains on short and intermediate term sell signals. We have no recommendation

Dollar index:

The December dollar index advanced 24 points on volume of 33,648 contracts. Total open interest increased by a massive 1,758 contracts, which relative to volume is approximately 110% above average meaning aggressive new buyers were entering the market in large numbers and driving prices to a new high for the move of 100.230. As this report is being compiled on November 27, the dollar index is trading higher again, up 24 points and has made another new high for the move of 100.255. The dollar index remains on short and intermediate term buy signals. We have no recommendation.

Australian dollar: On November 25, the December and March Australian dollar generated short and intermediate term buy signals.

The December Australian dollar advanced 60 pips on volume of 71,257 contracts. Total open interest increased just 3 contracts. As this report is being compiled on November 27, the December contract is trading 62 pips lower, which is to be expected after the generation of a buy signals. On November 26, the December contract traded lower in light holiday activity.

OIA thinks there may be a solid trade on the long side of the Australian dollar and though the Australian economy is performing dismally, especially because of its trade relationship with China, the fact is that the interest rate differential between the Australian dollar and other major currencies is wide. Additionally, as we alluded to in Wednesday’s report, the Australian dollar is outperforming most of the major currency pairs.

For example, the Australian dollar is outperforming the Canadian dollar by 1.97%, and the Swiss franc by 8.60%, the euro by 8.30% the US dollar by 1.91% the New Zealand dollar by 0.29%, the yen by 3.86% and the pound by 4.50% during the past 90 days.

Additionally, managed money is short the Australian dollar, which will support the currency as prices move higher. We prefer to wait until Monday before making a decision on a recommendation. Also, next week is going to be potentially chaotic due to the meeting of the ECB on December 3 and the employment report on December 4. We will keep you advised.

S&P 500 E-mini:

The December S&P 500 E-mini advanced 3.25 points on volume of 750,018 contracts. Total open interest increased by 5,694 contracts, which relative to volume is approximately 65% below average. As this report is being compiled on November 27, the December contract is trading 1.00 point above yesterday’s close.

Since November 19, the E-mini has been making fractional highs, but has not been able to take out the November 3 print of 2110.25. For example, on November 19, the December contract made a high of 2089.25, which was 6.75 points above the November 18 high of 2082.50. The November 20 high of 2094.50 was 5.25 points above the 2089.25 high of November 19. The high of November 26 of 2098.25 was 3.75 points above the 2094.50 of November 20.

This action is indicative of a weak market, especially because the current period is a traditionally strong seasonally for equities. In summary, since making its high for the move on November 3, the December contract is trading lower for the month. We are continuing to monitor the E-mini looking for a spot to initiate short call positions. Additionally, we are examining the possibility of recommending option straddles and strangles.