Bloomberg Access:{OIAR<GO>

Soybeans: November soybeans are headed for a short term sell signal on August 29 and this will occur if the daily high remains below OIA’s key pivot point for August 29 of $9.76. This will reverse the short term buy signal of August 17.

Corn: December corn is headed for a short term sell signal on August 29 and this will occur if the daily high remains below OIA’s key pivot point for August 29 of 3.31 7/8. This will reverse the short term buy signal of August 19.

WTI crude oil:

October WTI crude oil gained 31 cents on light volume of 878,803 contracts. Total open interest increased 6,774 contracts, which relative to volume is approximately 60% below average. The October contract accounted for a loss of 3,051 of open interest. As this report is being compiled on August 29, the October contract is trading 89 cents lower and has made a daily low of 46.62, which is below Friday’s print of 46.94, but above the low of August 25 of 46.42.

The COT report released on Friday show that managed money added 11,858 contracts to their long positions and liquidated a massive 74,671 of their short positions. Commercial interests liquidated 21,936 of their long positions and also liquidated 17,421 of their short positions. As of the latest report, managed money is long WTI crude oil by a ratio of 3.19:1, which is up sharply from the previous week of 1.76:1 and the ratio two weeks ago of 1.32:1. Three weeks ago, the ratio stood at a major low of 1.28:1. The October contract remains on short and intermediate term buy signals, and we think that crude should be traded from the long side, although we have no specific recommendation.

Natural gas: On August 26, October and November 2016 natural gas generated short term buy signals. This reversed the August 10 short term sell signals. December natural gas will likely generate a short term buy signal on August 29.

October natural gas advanced 2.8 cents on volume of 370,702 contracts. Total open interest declined by 4,439 contracts, which relative to volume is approximately 45% below average. The September contract accounted for a loss of 9,422 of open interest. On Friday the October contract made a high of $2.949, which is the highest print since 2.911 made on July 29.

The COT report revealed that managed money added 11,465 contracts to their long positions and liquidated 24,386 of their short positions. Commercial interests liquidated 43,712 of their long positions and also liquidated 19,641 of their short positions. As of the latest report, managed money is short natural gas by a ratio of 1.16:1, which is down from the previous week’s ratio of 1.34:1 and the ratio two weeks ago of 1.25:1.

On Friday we recommended the initiation of bullish positions and suggested using the December 2016 contracts with strikes based upon your risk tolerance. We think the market is going higher, but it is due for a correction now that short term buy signals have occurred. The correction could last from 1-3 days before resuming the uptrend.

Dollar index:

In response to the speech by the chair of the Federal Reserve on Friday, the dollar index rallied sharply closing 79.9 points higher on heavy volume of 43,152 contracts. Total open interest declined by 1,044 contracts, which relative to volume is average. A total open interest decline on Friday’s sharp advance continues the negative open interest action we have seen in the dollar index for the past several weeks. It is apparent the Fed is getting a bit more hawkish with respect to raising interest rates and this is likely to propel the dollar index higher.

The COT report released on Friday show that leveraged funds liquidated 2,734 of their long positions and also liquidated 2,441 of their short positions. As a result, leveraged funds are short the dollar index by a ratio of 2.74:1, up from the previous week of 2.28: 1 and the ratio two weeks ago of 2.13:1. For a short term buy signal to occur, the low of the day must be above OIA’s key pivot point for August 29 of 95.552. We have no recommendation.

Swiss franc: The September and December Swiss franc will generate short and intermediate term sell signals on August 29.

Australian dollar: The September and December Australian dollar will generate short term sell signals on August 29, but remain on intermediate term buy signals.

Yen: The September and December Japanese yen will generate short term sell signals on August 29, but remain on intermediate term buy signals.