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The volume and open interest stats for currency futures on September 10 are distorted due to the expiration of the September contract and switching to December. As a result, we will not make comparisons of open interest increases relative to volume.

Dollar index:

The September dollar index lost 56.8 points on heavy volume of 96,604 contracts. Total open interest increased by 685 contracts. As this report is being compiled on September 11, the December dollar index is trading 23.7 points lower on the day and has made a daily low of 95.345, which is the lowest print since 95.210 made on September 1. From September 3 through September 11, the dollar index has been trading in a series of lower highs and lower lows with the exception of September 9. The December dollar index remains on short and intermediate term sell signals.

The daily high for the December contract has been 95.870, which is below OIA’s pivot point for September 11 of 95.993, and this means the dollar index has resumed its downtrend. We have no recommendation.

Euro:

The September euro advanced 88 pips on heavy volume of 561,603 contracts. Total open interest increased by 11,738 contracts. As this report is being compiled on September 11, the December euro is trading 55 pips above yesterday’s close and has made a daily high of 1.1364, which is the highest print since 1.1367 made on August 27. From September 4 through September 11, the December contract has been making in a series of higher lows and higher highs with the exception of September 9. The December euro remains on short and intermediate term buy signals. We have no recommendation.

Thus far in trading on September 11, the December contract has made a daily low of 1.1272, which is above OIA’s pivot point for September 11 of 1.1261 for the resumption of the uptrend in the euro.

British pound:

The September British pound advanced 1.02 cents on volume of 225,792 contracts. Total open interest increased by 15,959. As this report is being compiled on September 11, the December Pound is trading 39 pips lower and has not taken out yesterday’s print of 1.5477. Continue to stand aside. The December Pound remains on a short and intermediate term sell signals.

Yen:

The September yen lost 5 pips on heavy volume of 351,433 contracts. Total open interest increased by 10,688 contracts. As this report is being compiled on September 11, the December contract is trading 2 pips lower on the day. 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 September 11 of .8188. The December contract remains on short and intermediate term buy signals. We have no recommendation.

WTI crude oil:

October WTI crude oil advanced $1.77 on heavy volume of 960,852 contracts. Volume was the strongest since September 3 when the October contract gained 50 cents on volume of 989,578 contracts and total open interest increased by 17,849. On September 10, total open interest increased just 111 contracts. The October contract lost 39,816 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in October and increase total open interest by a minor amount. Considering the magnitude of the advance in yesterday’s trading, the open interest action was disappointing.

Yesterday’s price and open interest action is the worst since the rally began on August 27. Additionally, the Brent contract has been unable to generate a short-term buy signal, which is lending credence that the short term buy signal in WTI on September 3 may have been false.

As this report is being compiled on September 11, the October contract is trading 77 cents lower and has made a daily low of 44.16, which is above the September 10 print of 43.36, and a daily high of 45.88, which is below yesterday’s print of 46.04.

For the rally to resume, the October contract must make a daily low above OIA’s pivot point for September 11 of $45.39. If it is unable to accomplish this, the market will trade sideways to lower. A short-term sell signal, which reverses the buy signal will occur if the daily high in the October contract is below OIA’s key pivot point for September 11 of $43.22. We have no recommendation.

Brent crude oil:

November Brent crude oil advanced $1.33 on volume of 728,970 contracts. Total open interest increased by 7,713 contracts, which relative to volume is approximately 50% below average, but the October contract lost 20,239 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in October and increase total open interest.

Interestingly, the open interest action in Brent on yesterday’s advance is the most positive since September 3 when the October contract gained 18 cents on volume of 795,991 contracts and total open interest increased by 18,913. On August 31, the October contract advanced $4.10 on volume of 842,463 and total open interest increased by 11,287.

As this report is being compiled on September 11, the November contract is trading 14 cents lower after making a daily low of $48.11, which is above yesterday’s print of 47.74. The downtrend in Brent will resume if the daily high is below OIA’s pivot point of $48.85. A short-term buy signal will be generated if the November contract makes a daily low above OIA’s key pivot point for September 11 of $51.01. We have no recommendation.

Gold: On September 10, December gold generated a short-term sell signal, which reversed the short-term buy signal of August 20. December gold remains on an intermediate term sell signal.

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

December gold gained $7.30 on volume of 127,481 contracts. Total open interest declined by 397 contracts, which is minuscule and dramatically below average. As this report is being compiled on September 11, the December contract is trading $6.30 lower and has made a daily low of 1097.70, which is not far from the contract low of $1073.70 made on July 24. We have no recommendation.

Cocoa:

December cocoa gained $6.00 on volume of 26,582 contracts. Total open interest increased by 2,144 contracts, which relative to volume is approximately 230% above average meaning a battle ensued between buyers and sellers and buyers were able to move the market fractionally higher.

The total open interest increase on September 10 was the fourth one in a row and the cumulative increase during this period is 14,574 contracts while the December contract advanced $162.00. While this is positive, it suggests that cocoa is loaded with speculative longs and is vulnerable to a shakeout before resuming its advance.

On September 8, OIA announced that December cocoa generated short and intermediate term buy signals, and has not had its customary correction. As a result, we continue to advise a stand aside posture until this has occurred. Currently, the December contract is trading $9.00 lower on the day.

Sugar: October sugar will generate a short-term buy signal on September 11.  However, the March 2016 contract will not generate a short-term buy signal. We will have more information on the position of managed money in the upcoming Weekend Wrap. The rally is a typical short covering affair, and manage money is massively short the market as the October contract approaches first notice day.

Corn: OIA reports on particular commodities and currencies when we see unusual activity. Corn experienced some unusual price and open interest action on September 10 and it may portend a seasonal upside move.

December corn advanced 5.75 cents on volume of 220,888 contracts. Although volume was unimpressive, the open interest action was astounding with total open interest increasing by a massive 17,192 contracts, which relative to volume is approximately 210% above average meaning aggressive new buyers were entering the corn market in large numbers and driving prices higher (3.74 3/4).

On September 9, though the December contract advanced only 0.75 cents on volume of 235,905 contracts, total open interest increased by 9465. In summary, December corn has advanced 6.50 cents during the past two days while total open interest has increased by a massive 26,657 contracts. At this juncture, we do not know whether the buying was primarily speculative or commercial in nature, but this will become apparent shortly.

As this report is being compiled on September 11, the December contract has exploded higher, trading 9.50 cents higher having made a daily high of 3.84 1/2, which is the highest print since 3.86 3/4 made on August 25. Surprisingly, December corn is getting close to generating a short-term buy signal. The the pivot point for today’s trading is 3.79 5/8, and this will likely change with Monday’s trading, but it gives clients a frame of reference for how December corn must perform on Monday to generate a short term buy signal. In order for a buy signal to occur, the low of the day must be above the pivot point.

It will be important for total open interest to increase in today’s trading, and the earliest indication of this will be in the preliminary report released by the exchange in the evening hours of September 11. We will provide this in the upcoming Weekend Wrap.

S&P 500 E-mini:  No report for September 11.