Bloomberg Access:{OIAR<GO>}

On April 21, the city of San Francisco experienced a major blackout and therefore our report for April 20 was not posted. We contacted each client by telephone and provided verbal updates. If there continue to be any questions about activity on April 20, please call or email.

On April 24, the euro is rallying sharply, and the dollar is trading sharply lower while the yen continues to lose altitude on the heels of the French elections as equity markets around the world advance sharply. Tomorrow, we will provide a report on activity in the markets we cover.

WTI crude oil: June and July 2017 WTI crude will generate short term sell signals on April 24. Both contracts remain on intermediate term sell signals.

June WTI crude oil lost $1.09 on volume of 1,161,077 contracts. Volume was only slightly above that of April 20 when the June contract lost 14 cents on volume of 1,050,264 and total open interest increased by 21,190 contracts. On April 21, total open interest increased only 1,922 contracts. On Friday, the June contract made a low of 49.20 and this has been taken out on April 24 with another new low of 49.03, which is the lowest print since 48.91 made on March 29.

The COT report revealed that managed money added 12,566 contracts to their long positions and liquidated 3,518 of their short positions. Commercial interests liquidated 11,695 of their long positions and also liquidated 6,758 of their short positions. As of the April 18 tabulation date for the report, managed money was long by a sizable 4.98:1, which was up from the previous week of 4.59:1 and substantially above the ratio 2 weeks ago of 2.97:1. Three weeks ago, managed money was long by ratio of 2.56:1. In summary, the ratio of managed money longs has nearly doubled during the past four weeks, and it occurred almost like clockwork: right at the top of the market.

We have been negative on the crude oil market even after it generated a short term buy signal, and see no reason to be involved at this juncture. Now that crude is on a short term sell signal, the market should experience a rally lasting 1-3 days and this would be the opportunity to initiate bearish positions for those who are looking for a place to short crude.

Gasoline: June and July 2017 New York gasoline will generate short term sell signals on April 24. Both contracts remain on intermediate term sell signals.

The COT report revealed that managed money added 3,463 to their long positions and also added 3,971 to their short positions. Commercial interests added 692 to their long positions and also added 3,238 to their short positions. As of the April 18 tabulation date, managed money is long gasoline by a ratio of 2.09:1, down from the previous week of 2.27:1 and up somewhat from the ratio two weeks ago of 1.90:1.

Heating oil: June and July 2017 New York heating oil will generate short term sell signals on April 24. Both contracts remain on intermediate term sell signals.

The COT report revealed that managed money added 4,647 to their long positions and also added 542 to their short positions. Commercial interests liquidated 833 of their long positions and added 5,627 to their short positions. As of the April 18 tabulation date, managed money was long heating oil by ratio of 3.07:1, up from the previous week of 2.87:1 and almost double the ratio two weeks ago of 1.88:1.

Natural gas: June natural gas is getting close to generating a short term sell signal and will likely occur in tomorrow’s trading. OIA’s key pivot point is $3.232, and the high for the day must be below the pivot point for the sell signal to be generated.

The COT report revealed that managed money liquidated 3,418 of their long positions and also liquidated 14,270 of there short positions. Commercial interests liquidated 14,741 of their long positions and also liquidated 3,809 of their short positions. As of the April 18 tabulation date, managed money was long natural gas by a ratio of 2.74:1, up from the previous week of 2.45:1 and the ratio two weeks ago of 2.40:1.

An intermediate term sell signal will be generated if the daily high is below OIA’s he pivot point for April 24 of 3.148. If in fact and intermediate term sell signal is generated, there will be plenty of fuel provided by managed money long positions that will be liquidated as the market works its way lower.

Corn: On April 21, July Chicago corn generated a short term sell signal, which reversed the April 13 short term buy signal. July corn remains on an intermediate term sell signal.

July corn lost 0.50 cents on strong volume of 518,069 contracts. Volume was the heaviest since April 13, the day of the short term buy signal when 588,191 contracts were traded and total open interest increased by 18,705 while the July contract gained 2.00 cents. On April 21, total open interest declined by 21,332 contracts, which relative to volume is approximately 55% above average meaning liquidation was substantial as corn prices made a new low for the move of  3.60 3/4, which took out the previous low of 3.61 3/4 made on March 27.

The COT report revealed that managed money liquidated 11,912 of their long positions and added 1,222 to their short positions. Commercial interests added 11,665 to their long positions and liquidated 4,910 of their short positions. As of the April 18 tabulation date, managed money was short corn by a ratio of 1.86:1, up from the previous week of 1.74:1, which was exactly the ratio two weeks ago (1.74:1). In summary, managed money continues to assume an increasingly bearish outlook, which we believe is not far away from back firing.

As this report is being compiled on April 24, the July contract is trading 1.75 cents higher on the day after making a daily low of 3.62 1/2, which is above Friday’s print. If Friday’s low of 3.60 3/4 holds and a new short term buy signal is generated, this would be a very bullish development. A short term buy signal will occur if the daily low is above OIA’s key pivot point for April 24 of 3.72 1/4. Until corn generates a short term buy signal, we recommend that clients remain on the sidelines.

From the April 19 note on corn:

“Currently, the July contract is trading below the sell signal pivot point into the close and this increases the likelihood that a sell signal will occur in tomorrow’s trading.”

“This means a test of the March 27 low of 3.61 3/4 and penetration of this to make further new lows is likely. As a consequence, we recommend paring back bullish positions and tightening up exit points.”

Euro: On April 24, the June euro will generate short and intermediate term term buy signals.

EUR/JPY: EUR/JPY  will generate a short term buy signal on April 24, but remains on intermediate term sell signal.

EUR/GBP: EUR/GBP will not generate a short term buy signal on April 24.

S&P 500 E-mini: The June S&P 500 E-mini will generate a short term buy signal on April 24 and remains on an intermediate buy signal.