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WTI crude oil: April WTI will generate an intermediate term buy signal on March 10 if the daily low remains above OIA’s key pivot point for March 10 of $37.11. On March 3, OIA announced that April and May WTI crude oil generated short term buy signals.

April WTI crude oil advanced $1.79 on heavy volume of 1,430,577 contracts. Total open interest declined by 1,024 contracts. The April contract accounted for a loss of 50,188 of open interest, which means there were insufficient open interest increases in the forward months to turn total open interest positive.

Yesterday, the April contract made a high of 38.51, which took out the March 8 high of 38.39. As this report is being compiled on March 10, the April contract is trading 69 cents lower and has made a daily low of $37.21, which is above OIA’s key pivot point for March 10 of 37.11 for the generation of an intermediate term buy signal.

The market is trading firmly even though the S&P 500 is trading 17.25 points lower. Yesterday’s performance was outstanding considering the sizable build in crude oil inventory in the EIA report. Although, crude is certainly due for a decent sized correction, we think the rally continues. We have no recommendation.

Gasoline: April gasoline will generate an intermediate term buy signal on March 10 if the low of the day remains above OIA’s key pivot point for March 10 of 1.3957. The May contract will also generate an intermediate term buy signal on March 10 if April makes its low above the pivot point. On March 7, OIA announced that April and May gasoline generated short-term buy signals.

April gasoline advanced 8.27 cents on very heavy volume of 288,681 contracts. However, total open interest increased by just 1,013 contracts, a major disappointment. The April contract lost 5,992 of open interest and there was sufficient open interest increases in the forward months to offset the decline in April. Considering the magnitude of the advance and heavy volume, total open interest action was  tepid As this report is being compiled on March 10, the April contract is trading 3.75 cents lower after making a new high for the move overnight of 1.4806. We have no recommendation.

Dollar index:

The March dollar index lost 4.7 points on heavy volume of 47,920 contracts. Total open interest increased 260 contracts, which relative to volume is approximately 70% below average. As this report is being compiled after the announcement by the ECB to reduce interest rates and add 20 billion dollars per month to its quantitative easing program, the March contract is trading sharply lower, down 1.159 points and has made a new low for the move of 95.940, which is the lowest print since 96.07 made on February 15. On February 29, the March and June dollar index generated short-term buy signals, and never generated intermediate term buy signals. It is inevitable that a short-term sell signal will occur and is likely tomorrow. We have no recommendation.

Euro:

The March euro lost 10 pips on heavy volume of 506,882 contracts. Total open interest declined by 1,631 contracts, which relative to volume is approximately 85% below average. The March contract lost 109,487 of open interest. As this report is being compiled on March 10, after the announcement by the ECB, the March contract is trading sharply higher, up 1.87 cents or+ 1.69% and has made a new high for the move of 1.1219, which is the highest print since 1.1253 made on February 16. On February 29, the March and June euro generated short-term sell signals and intermediate term sell signals on March 1. Tomorrow, it appears a certainty that these signals will reverse and that short and intermediate term by signals will be generated. We have no recommendation.

British pound:

The March British pound gained 10 pips on heavy volume of 194,976 contracts. Total open interest increased by a massive 31,243 contracts, which relative to volume is approximately 420% above average meaning aggressive new buyers and sellers were entering the market, and buyers were able to edge the market slightly higher.

As this report is being compiled on March 10, the March pound continues its rise trading 66 pips higher and has made a new high for the move of 1.4318, which is the highest print since 1.4305 made on February 22. Although we think there is going to be a terrific trade to take advantage of lower prices, which we think is imminent, it is premature to enter bearish positions. Conceivably, the March/June contracts could generate a short term buy signals as early as tomorrow. The March contract will generate a short-term buy signal, if the daily low is above OIA’s key pivot point for March 10 of 1.4265. Continue to stand aside.

S&P 500 E-mini:

The March S&P 500 E-mini advanced 8.00 points on volume of 2,045,917 contracts. Total open interest increased by 16,701 contracts, which relative to volume is approximately 55% below average. The March contract lost 185,193 of open interest and there were sufficient open interest increases in the forward months to offset the decline in March and increase total open interest slightly. Yesterday’s performance was positive and continues the total open interest increases since February 22 every time the E-mini closes positively.

As this report is being compiled on March 10, after the ECB announcement, the March contract is trading 13.00 points lower and has made a new low for the move of 1967.25, which is the lowest print since 1966.25 made on March 2. Conceivably, the E-mini may have made a top on March 10 and that today is a key reversal day.

The E-mini has rallied approximately 200 points from the February 11 low of 1802.50.If the S&P 500 E-mini is to move above today’s high, it will need a new catalyst, and we do not see one on the horizon. Today’s reaction from equity indices to the ECB’s quantitative easing measure is negative, which may indicate the market perceives that major central banks are out of bullets to stimulate their economies. The March contract remains on a short-term buy signal, but an intermediate term sell signal. At this juncture, we have no recommendation.