Bloomberg Access:{OIAR<GO>}

WTI crude oil:

March WTI crude oil lost 47 cents on very light volume of 769,999 contracts. Volume traded on January 23 is the lowest since December 30 when 496,057 contracts were traded and total open interest increased by 13,117 while crude oil lost 5 cents. On January 23, total open interest increased by 8,236 contracts, which relative to volume is approximately 45% below average and an open interest increase on yesterday’s decline is negative. As this report is being compiled on January 24, the March contract is trading 74 cents higher on the day on low volume and has made a daily high of 53.52, which is just slightly above yesterday’s print of 53.57.

At this juncture, we see no reason to be involved in crude oil. For the rally to resume, the low of the day must be above OIA’s pivot point of $53.64. For a short term sell signal to occur the high of the day must be below OIA’s key pivot point of 52.31.

Gold:

April gold advanced $10.70 on strong volume of 279,743 contracts. Total open interest increased by 4,616 contracts, which relative to volume is approximately 35% below average, however, a total open interest increase on yesterday’s advance is very positive. The open interest action in gold lately has been bullish.

As this report is being compiled on January 24, the April contract is trading 3.10 lower on the day and has made a daily high of 1223.00, which is slightly above yesterday’s print. On January 5, OIA announced that April gold generated short term buy signal and remains on an intermediate term sell signal as of January 24.

Although, longer-term we are bullish gold, the reality is the major thrust of the advance has been caused by a substantial decline in the dollar index. As a result, we think being long at current levels is potentially hazardous because we are bullish on the dollar index and think the rally will resume once a sufficient number of speculative longs in the dollar are washed out.

Dollar index:

March dollar index lost 56.0 points on volume of 40,700 contracts. Total open interest increased by 245 contracts, which relative to volume is approximately 75% below average, but a total open interest increase on yesterday’s steep decline is bearish. As this report is being compiled on January 24, the March contract is trading close to unchanged on the day.

On January 12, OIA announced that the March dollar index generated a short term sell signal and as of January 24 remains on an intermediate term buy signal. For an intermediate term sell signal to occur, the high of the day must be below OIA’s key pivot point for January 24 of 100.302 and the high thus far on January 24 has been 100.395. Continue to stand aside.

10 Year Treasury Note:

The March ten year note advanced 19 points on volume of 1,686,215 contracts. Surprisingly, total open interest increased by a minuscule 3,852. This indicates a lack of enthusiasm on the part of new buyers. As this report is being compiled on January 24, the March contract has reversed course and is trading 16.5 points lower on the day. On January 5, OIA announced that the March ten year note generated a short term buy signal and currently remains on an intermediate term sell signal. Stand aside.

British pound: On January 23, the March British pound generated a short term buy signal and remains on an intermediate term sell signal.

The March British pound advanced 1.22 cents on volume of 106,315 contracts. Total open interest increased by 489 contracts, which relative to volume is approximately 80% below average, however a total open interest increase indicates that new buyers were pushing the market higher. This is a marked contrast to previous sessions when open interest declined whenever the pound rallied.

The March contract is getting close to generating an intermediate term buy signal and this will occur if the daily low is above OIA’s key pivot point for January 24 of 1.2476. The low thus far in trading on January 24 has been 1.2431. Currently, the pound is trading 20 pips higher on the day and has made a daily high of 1.2556, which matches yesterday’s high print. Stand aside.

S&P 500 E-mini:

On January 24, the March S&P 500 E-mini is rallying sharply, up 15.25 points and has made a new all-time high of 2278.00, which takes out the previous all-time high of 2277.00 made on January 6. Though, the March contract remains on short and intermediate term buy signals, for the rally to continue the March contract must make a daily low above OIA’s pivot point of 2267.77 and the low thus far in trading on January 24 has been 2259.50.