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Corn:

December corn lost 1.50 cents on volume of 416,658 contracts. Total open interest increased by 17,803 contracts, which relative to volume is approximately 70% above average meaning a battle ensued between buyers and sellers and sellers were able to edged the market slightly lower. The December contract lost 21,020 of open interest, which means there was more than enough open interest increases in the forward months to offset the decline in December and increase total open interest substantially.

As this report is being compiled on November 9, the December contract is trading 3.75 cents lower and has made a new low for the move of 3.69 1/4. December corn remains on short and intermediate term sell signals. We have no recommendation.

Chicago wheat:

December Chicago wheat lost 3.00 cents on heavy volume of 182,210 contracts. Volume fell from November 5 when the December contract closed unchanged on volume of 218,983 contracts and total open interest declined by 6,183. On November 6, total open interest declined by 1990 contracts, which relative to volume is approximately 50% below average. The December contract lost 14,549 of open interest. As this report is being compiled on November 9, the December contract is trading sharply lower, down 12.50, or -2.39%. December Chicago wheat remains on a short-term buy signal, but an intermediate term sell signal. We have no recommendation.

Cocoa:

December cocoa lost $24.00 on very heavy volume of 70,551 contracts. Volume was the strongest since August 7 when 68,360 contracts were traded and the December contract closed at $3,121. On November 6, total open interest increased by 683 contracts, which relative to volume is approximately 50% below average, but an open interest increase on Friday’s decline is negative. Additionally, the December contract lost 9,186 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in December and increase total open interest. Again, this is negative.

Additionally, we have seen a series of days recently when open interest action is acting in a bearish pattern: it declines when prices advance and increases when prices decline. As we pointed out in the weekend report, we think that cocoa prices will likely reach a higher level beginning next year, but for now the market does not have the momentum for a sustainable advance that could take out contract highs. December and March cocoa remain on short and intermediate term buy signals.

Sugar #11: March 2016 sugar is getting close to generating a short-term sell signal and this will occur if the daily high is below OIA’s key pivot point for November 9 of 14.11.

WTI crude oil:

December WTI crude oil lost 91 cents on heavy volume of 843,692 contracts. Volume was fractionally lower than November 5 when the December contract lost $1.12 on volume of 845,633 contracts and total open interest declined by 6,891 contracts. On November 6, total open interest increased just 1,184 contracts, but the December contract lost 43,563 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in the December contract and increase total open interest slightly. The open interest action on Friday was bearish.

As this report is being compiled on November 9, the December contract is trading 52 cents lower and has made a new low for the move of 43.64, which is the lowest print since $43.06 made on October 28. As we pointed out in the weekend report, the December contract is trading at a substantial discount to the forward months, and this is reflective of a seasonal tendency for WTI prices to decline into January and early February. December WTI remains on short and intermediate term sell signals. We have no recommendation.

Silver: December and March silver will generate intermediate term sell signals on November 9 after generating short term sell signals on November 2.

December silver lost 29.2 cents on volume of 64,752 contracts. Total open interest declined by 175 contracts, which is minuscule and substantially below average. The December contract lost 2,848 of open interest. As this report is being compiled on November 9, the December contract is trading 21.1 cents lower and has made a new low for the move of 14.460, which is the lowest print since $14.360 made on October 2. It appears likely that silver is going to test the contract low of $13.950. We have no recommendation.

Dollar index:

The December dollar index rose by a strong 1.210 points on volume of 50,871 contracts on a strong employment report. Total open interest increased by a massive 3,418 contracts, which relative to volume is approximately 165% above average meaning aggressive new buyers were entering the market in large numbers and driving prices to a new high for the move of 99.470, which is the highest print since 99.835 made on April 16, 2015. As this report is being compiled on November 9, the December contract is trading 22 points lower and has not taken out Friday’s high. On October 23, OIA announced that the December dollar index generated a short-term buy signal and an intermediate term buy signal on October 26. We have no recommendation.

British pound: On November 6, the December British pound generated short-term sell signals, which reverses the October 15 short-term buy signal. The December and March pound remains on an intermediate term sell signals.

The December British pound lost 1.69 cents on volume of 125,015 contracts. Total open interest increased by 6,334 contracts, which relative to volume is approximately 100% above average meaning aggressive new short-sellers were entering the market in large numbers and driving prices to a new low for the move of 1.5023, which is the lowest print since 1.5023 made on April 24, 2015. As this report is being compiled on November 9, the December pound is having its usual counter trend rally after the generation of a sell signal and trading 74 pips above yesterday’s close. We have no recommendation.

10 Year Treasury Note:

The December 10 year treasury note lost 25 points on heavy volume of 1,877,820 contracts. Volume was the strongest since October 2 when 1,920,837 contracts were traded and the December contract closed at 129-110. On November 6, total open interest declined by 13,981 contracts, which relative to volume is approximately 60% below average. On November 6, the December contract made a new low for the move of 125-280 and this has been taken out on November 9 with another new low of 125-225, which is the lowest print since 125-195 made on July 30, 2015.

Ever since the December contract generated a short-term sell signal on October 29, the December contract has been unable to rally which usually occurs after the generation of a sell signal. On November 9 even with the major indices trading sharply lower, the December contract is not able to advance much beyond Friday’s close. The implications of rising interest rates on the dollar index and housing sector is most definitely negative for equities despite the seasonal tendency for equities to rise in the fourth quarter and into the early first quarter. We have no recommendation.