Bloomberg Access:{OIAR<GO>}

Live cattle:

December live cattle advanced 1.30 cents on volume of 53,033 contracts. Total open interest declined by 1,749 contracts, which relative to volume is approximately 20% above average. The October contract lost 6,004 of open interest. As this report is being compiled on September 22, the December contract is trading 75 points lower and will not generate a short term buy signal on September 22. Stand aside.

WTI crude oil:

November WTI crude oil gained $1.29 on volume of 1,057,113 contracts. Total open interest increased by 16,470 contracts, which relative to volume is approximately 40% below average. The October contract lost 1,224 of open interest. As this report is being compiled on September 22, the November contract is trading $1.04 higher and has made a daily high of 46.52 and a low of 45.52, which is considerably below OIA’s key pivot point for September 22 for the generation of a short term buy signal. A short term buy signal will occur if the daily low is above OIA’s key pivot point for September 22 of $46.22. Stand aside.

Natural gas:

November natural gas gained 2.3 cents on volume of 412,764 contracts. Total open interest declined by 3,695 contracts, which relative to volume is approximately 55% below average. The October contract accounted for a loss of 23,043 of open interest. As this report is being compiled on September 22, the November contract is trading 4.0 cents lower on the day after the EIA released its natural gas storage report.

The Energy Information Administration announced that working gas in storage was 3,551 Bcf as of Friday, September 16, 2016, according to EIA estimates. This represents a net increase of 52 Bcf from the previous week. Stocks were 140 Bcf higher than last year at this time and 268 Bcf above the five-year average of 3,283 Bcf. At 3,551 Bcf, total working gas is above the five-year historical range.

Gold: December gold will generate a short term buy signal on September 22, which reverses the September 16 short term sell signal. December gold remains on an intermediate term buy signal. Also, the two major gold ETFs, ticker symbol: GDX and GDXJ will generate short term buy signals on September 22.

December gold advanced $13.20 on strong volume of 285,602 contracts. Total open interest exploded higher, up 17,955 contracts, which relative to volume is approximately 140% above average. The open interest increase in yesterday’s trading is the first since September 7 when the December contract lost 4.90 on volume of 164,880 contracts and total open interest increased by 7,810. Additionally, it is the first total open interest increase on a price advance since September 6 when the December contract gained 27.30 on volume of 305,622 contracts and total open interest increased by 28,791.

As this report is being compiled on September 22, the December contract is trading $13.20 above yesterday’s close on light volume and has made a new high for the move of 1347.80, which is the highest print since 1353.90 made on September 8. We think clients should begin to position themselves on the bullish side of the gold trade and though the market will likely have a slight pullback from here, the fact is the December contract is trading close to its 50 day moving average of 1338.00, which represents fair value for the past 2 1/2 months.