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Corn:

December corn advanced 4.00 cents volume of 252,997 contracts. Volume fell from October 28 when the December contract lost 4.00 cents on volume of 271,300 contracts and total open interest increased by 10,667. On October 29, total open interest increased by a sizable 8,013 contracts, which relative to volume is approximately 10% above average meaning new buyers were entering the market and driving prices higher (3.80 1/2). The December contract lost 4,156 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 by an above average amount.

As this report is being compiled on October 30, the December contract is trading 3.25 cents higher and has made a daily high of 3.83 3/4, which is the highest print since 3.87 1/2 made on October 27. The wheat market has been strong of late, and this is likely giving corn a boost. However, December corn remains on short and intermediate term sell signals. We have no recommendation.

Chicago wheat: December Chicago wheat will generate a short-term buy signal on October 30 if the daily low remains above OIA’s key pivot point for October 30 of 5.11 7/8. Additionally, the December contract is getting close to generating an intermediate term buy signal and though this will not occur on October 30, it could take place next week.

December Chicago wheat advanced 9.00 cents on heavy volume of 164,621 contracts. Total open interest increased by 1,974 contracts, which relative to volume is approximately 45% below average, but a total open interest increase on yesterday’s advance is positive. Additionally, the December contract lost 3,677 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.

As this report is being compiled on October 30, the December contract is trading higher again, this time by 7.75 cents and has made a new high for the move of 5.23 1/2, which is the highest print since 5.22 made on October 8. The previous high occurred on October 7 (5.31 1/2). The December contract will generate an intermediate term buy signal if the daily low is above OIA’s key pivot point for October 30 of 5.22 1/2. We have no recommendation.

Soybeans: On October 29, January soybeans generated a short-term sell signal, which reverses the October 14 short-term buy signal. January soybeans remain on an intermediate term sell signal.

January soybeans lost 2.50 cents on volume of 305,937 contracts. Volume declined from October 28 when the January contract lost 8.25 cents on volume of 309,918 contracts and total open interest declined by 8,641. On October 29, total open interest declined by 6,571 contracts, which relative to volume is approximately 15% below average. The November contract, which enters first noticed day lost 20,341 of open interest and there were sufficient open interest increases in the forward months to reduce much of the decline in November. We consider the price and open interest action on October 29 to be bearish. As this report is being compiled on October 30, the January contract is having its usual counter trend rally, which could carry on into early next week. We see no compelling reason to be involved in soybeans or the soybean complex.

Live cattle:

December live cattle lost 80 points on heavy volume of 64,462 contracts. Volume was the strongest since October 7 when 102,059 contracts were traded and the December contract closed at 1.36150. On October 29, total open interest increased by 1,166 contracts, which relative to volume is approximately 25% below average, but an open interest increase on yesterday’s price decline is negative. The October contract lost 244 of open interest, December -2008, which means there were sufficient open interest increases in the forward months to offset the decline in the two delivery months and increase total open interest. This is bearish.

As we pointed out in previous reports, price and open interest action continues to acting a bearish fashion: open interest increases on price declines and on advances, open interest decreases. As this report is being compiled on October 30, the December contract is trading 1.40 cents lower and has made a daily low of 1.41325, which is the lowest print since 1.40050 made on October 27. On October 19, December live cattle generated a short-term buy signal, but remains on an intermediate term sell signal. We have no recommendation.

Cocoa: On October 30, December and March cocoa generated short and intermediate term buy signals.

December cocoa lost $4.00 on volume of 35,553 contracts. Total open interest increased by 530 contracts, which relative to volume is approximately 40% below average, and it appears that a battle ensued between buyers and sellers in yesterday’s trading.

On October 28, December cocoa advanced $22.00 on volume of 49,296 contracts and total open interest declined by 1,299. On October 27, December cocoa advanced $23.00 on volume of 37,523 contracts and total open interest increased by 2,152.

In summary, from October 27 through October 29 December cocoa advanced $41.00 while total open interest increased by 1,383 contracts in this period. While this is not exactly barn burning numbers, the cocoa market has a favorable moving average set-up and fundamentals are positive as well. Now that cocoa is on short and intermediate term buy signals, the market should pullback from 1-3 days and this is the opportunity to initiate bullish positions.

WTI crude oil:

December WTI crude oil advanced 12 cents on volume of 739,895 contracts. Total open interest declined by 16,951, which relative to volume is approximately 10% below average. The December contract accounted for loss of 12,648 of open interest, and there were enough open interest decreases in the forward months to add to the loss of the December contract.

As this report is being compiled on October 30, the December contract is trading 35 cents higher and has made a daily high of 46.61, which is below yesterday’s print of 46.79. We are monitoring WTI for the possible initiation of bearish positions, but feel it is premature at this juncture. For the December contract to continue its advance, it must make a daily low above OIA’s key pivot point for October 30 of $47.18, and this would generate a short-term buy signal. We have no recommendation.

Gold: On October 30, December gold will generate a short-term sell signal, but remains on an intermediate term buy signal.

December gold lost $28.80 on volume of 163,490 contracts. Surprisingly, volume was substantially below that of October 28 when December gold advanced $10.30 on volume of 198,732 contracts and total open interest increased by 4,059. On October 29, total open interest declined by a massive 12,039 contracts, which relative to volume is approximately 185% above average, meaning that liquidation was extremely heavy on yesterday’s strong decline. As clients know, we have been skeptical about the recent upside move in gold, and have advised a stand aside posture.

Silver:

December silver lost 74.3 on volume of 66,445 contracts. Volume declined from October 28 when the December contract gained 43.0 cents on volume of 77,386 contracts and total open interest increased by 6,298. On October 29, total open interest declined by 3,670 contracts, which relative to volume is approximately 120% above average meaning that liquidation was extremely heavy on yesterday’s major loss. As this report is being compiled on October 30, the December contract is trading near unchanged. For the December contract to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for October 30 of $15.596. We have no recommendation.

Copper:

December copper lost 4.15 cents on volume of 61,000 contracts. Total open interest increased by 422 contracts, which relative to volume is approximately 60% below average, but an open interest increase on yesterday’s strong decline is bearish. As this report is being compiled on October 30, the December contract is trading 55 ticks lower and has made a new low for the move of $2.3090. For the December contract to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for October 30 of $2.3343. We have no recommendation.

Dollar index:

The December dollar index lost 49.7 points on volume of 35,376 contracts. Total open interest increased by 746 contracts, which relative to volume is approximately 20% below average, but yesterday’s open interest increase on the price decline continues the bearish pattern we have been seeing ever since the dollar index generated a short-term buy signal on October 23 and the intermediate term buy signal on October 26. As this report is being compiled on October 30, the December contract is trading lower again, this time by 49.4 points. We have no recommendation.

Euro:

The December euro advanced 72 pips on volume of 237,827 contracts.  Total open interest increased by a sizable 6,512 contracts, which relative to volume is average. As this report is being compiled on October 30, the December contract is trading higher again, this time by 49 pips and has made a new high for the move of 1.1079, which is the highest print since 1.1104 made on October 28.

Since generating short and intermediate term sell signals on October 23, the open interest action in the euro has been positive for the most part.  The open interest action in the euro and the dollar index is completely opposite of what it should be. The euro is on sell signals and open interest is acting bullishly whereas the dollar index is on buy signals and open interest is acting bearishly. We have no recommendation.

Australian dollar: On October 29, the December Australian dollar generated a short-term sell signal, which reverses the October 7 short-term buy signal. The December Australian dollar remains on an intermediate term sell signal.

The December Australian dollar lost 10 pips on volume of 73,639 contracts. Total open interest increased by a massive 3,248 contracts, which relative to volume is approximately 70% above average meaning huge numbers of new short-sellers were entering the market and driving prices to a new low for the move (70.53), which is the lowest print since 70.42 made on October 6. As this report is being compiled on October 30, the December contract is having a typical counter trend rally after the generation of a sell signal. We have no recommendation.

10 Year Treasury Note: On October 29, the December note generated a short-term sell signal, which reverses the July 6 short-term buy signal. The December contract remains on an intermediate term buy signal.

The December 10 year treasury note lost 19 points on volume of 1,575,356 contracts. Total open interest increased by 10,452 contracts, which relative to volume is approximately 65% below average, but an open interest increase on yesterday’s strong decline is bearish.

As this report is being compiled on October 30, the December contract is trading 4 points higher, but has made another new low for the move of 127-145, which is the lowest print since 127-140 made on September 25. The December contract will generate an intermediate term sell signal if the daily high is below OIA’s key pivot point for October 30 of 127-155. We have no recommendation.