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Dollar index:

The September dollar index lost 25.3 points on volume of 51,413 contracts. Total open interest increased by 1,424 contracts, which relative to volume is average. The September contract lost 1,758 of open interest. As this report is being compiled on September 9, the September contract is trading 24.3 points higher on the day. For the September contract to generate a short term buy signal, the low of the day must be above OIA’s key pivot point of 96.592. We have no recommendation.

Euro:

The September euro gained 36 pips on volume of 394,601 contracts. Total open interest increased by 9,834, which relative to volume is average. The September contract lost 44,799 of open interest. As this report is being compiled, the September contract is trading 36 pips lower and is in the territory of generating a short term sell signal. For this to occur the daily high must be below OIA’s key pivot point for September 9 of 1.1105. The rally will resume if the daily low is above OIA’s key pivot point for September 9 of 1.1241 

British Pound:

The September British pound advanced 2.10 cents on heavy volume of 198,128 contracts. Surprisingly, total open interest increased by a strong 5,258 contracts, which relative to volume is average, but this indicates that shorts were not taken out of the market, which leaves the pound vulnerable to short covering if the pound continues to advance. Currently, the September contract is trading 36 pips lower and has not taken out yesterday’s high of 1.5412. We have no recommendation.

Yen:

The September yen lost 71 pips on heavy volume of 314,400 contracts. Total open interest increased by 5,169, which relative to volume is approximately 35% below average. The September contract lost 23,490 of open interest. As this report is being compiled on September 9, the yen is trading sharply lower, down 75 pips. For the September contract to generate a short term sell signal, the high of the day must be below OIA’s key pivot point for September 9 of .8168.

WTI crude oil:

October WTI crude oil lost 11 cents on volume of 868,704. Total open interest declined by 4,614, which relative to volume is approximately 75% below average. The October contract lost 47,337 of open interest, which means there was substantial open interest increases in the forward months to offset a good portion of the loss in October.

Currently, the October contract is trading $1.56 lower, but continues to trade above the Labor Day holiday lows of $44.14 and the September 2 low of 43.21. The first sign of trouble is a violation of 44.14. For a short term sell to be generated the high of the day must be below OIA’s key pivot point for September 9 of 43.22. The EIA report will be released Thursday, and this will provide the direction for the rest of the week. We have no recommendation.

Brent crude oil:

October Brent crude oil lost 7 cents on volume of 875,311. Total open interest increased by a sizable 28,053 contracts, which relative to volume is approximately 15% above average. The October contract lost 26,895 of open interest. Currently, the Brent contract is trading $1.01 lower and has made a low of $48.69.

We are becoming increasingly concerned about Brent’s inability to generate a short term buy signal, and it appears that Brent will lead the complex lower. For a short term buy signal to be generated, the low of the day must be above OIA’s key pivot point for September 9 of $50.32. The downtrend will resume if the high of the day is below OIA’s key pivot point for September 9 of $48.15. We have no recommendation.

Copper: December copper will generate a short term buy signal on September 9. The December contract remains on an intermediate term sell signal. 

December copper advanced a staggering 12.20 cents on huge volume of 117,949 contracts. Surprisingly, total open interest increased by 2,555, which relative to volume is approximately 20% below average, but nonetheless the open interest increase shows the dominant activity in yesterday’s trade was new buying. Currently copper is trading near unchanged and will not make a low above OIA’s secondary pivot for September 9 of 2.4264. Copper is an extremely volatile market to trade and we strongly advise against trading it.

10 year Treasury Note: The December 10 year note is getting close to generating a short term sell signal. For this to occur, the daily high must be below OIA’s key pivot point for September 9 of 126-25. 

Cocoa: On September 8, December cocoa generated short and intermediate term buy signals.

December cocoa advanced $52.00 on volume of 25,946. Total open interest increased for the second day in row on a price advance, this time by a massive 1,357, which relative to volume is approximately 105% above average. As this report is being compiled after the close on September 9, the December contract has closed $50.00 higher and is only 3.11% from its July 15 contract high of $3,375.

Now that cocoa is on buy signals, the market should pullback from 1-3 days and this is the time to initiate bullish positions. Do not chase cocoa, wait for the setback. 

S&P 500 E mini:

The September S&P 500 E mini advanced by a strong 44.00 points on volume of 2,024,997. Total open interest DECLINED by 13,565, which means that short sellers covering positions were powering the market higher. The pattern of bearish open interest action continues during advances and declines. As this report is being compiled on September 9, the September contract is trading 7.50 points lower after making a high of 1992.00 in the early morning hours of September 9. This is the highest print 192.75 made on August 28. We have no recommendation at this juncture.