Bloomberg Access:{OIAR<GO>}

Live cattle:

October live cattle advanced the 3.00 cent daily limit on total volume of 91,424 contracts. Volume declined somewhat from September 8 when the October contract lost 1.025 cents on volume of 91,986 contracts and total open interest declined by 246. On September 9, total open interest declined by a massive 3,773 contracts, which relative to volume is approximately 55% above average. The October contract lost 7,291 of open interest, December 2016 -654.

The COT report released on Friday showed that managed money added 3,172 their long positions and also added 6,275 to their short positions. Commercial interests added 414 to their long positions and liquidated 1,618 of their short positions. As of the latest report, managed money is long live cattle by a ratio of 1.46:1, down from the previous week of 1.59:1 and the ratio two weeks ago 2.30:1.

As this report is being compiled on September 12, the October contract is trading 1.950 higher cents on the day and has made a daily high of 106.500, which is the highest print since 106.675 made on September 1. For the October contract to generate a short term buy signal, the low of the day must be above OIA’s key pivot point for September 12 of 108.830. Stand aside.

WTI crude oil:

October WTI lost $1.74 on strong volume of 1,236,748 contracts. Volume declined from September 8 when the October contract gained $2.12 on volume of 1,399,019 contracts and total open interest increased by 23,756. On September 9, total open interest declined by a substantial 44,153 contracts, which relative to volume is approximately 20% above average meaning liquidation was extremely heavy on Friday’s large decline. The October contract accounted for a loss of 78,886 of open interest.

The COT report revealed that managed money liquidated 4,258 of their long positions and added 43,106 to their short positions. Commercial interests added 11,972 to their long positions and liquidated 5,030 of their short positions. As of the latest report, managed money is long crude oil by a ratio of 2.00:1, down sharply from the previous week of 2.87:1 and the ratio two weeks ago of 3.19:1.

As this report is being compiled on September 12, the October contract is trading 21 cents above Friday’s close and has made a daily low of 44.72, which is the lowest print since 44.55 made on September 7. For the October contract to generate a short term buy signal the low of the day must be above OIA’s key pivot point for September 12 of $47.10. Stand aside.

Gold:

December gold lost $7.10 on volume of 173,345 contracts. Total open interest declined by a sizable 5,756 contracts, which relative to volume is approximately 20% above average. This is the second day in a row in which open interest has declined by an above average rate. The COT report was a bit troubling because it indicated that managed money massively increased their net long exposure by adding 25,012 contracts to their long positions and liquidating 12,929 of their short positions. Commercial interests added only 194 contracts to their long positions and added 18,255 to their short positions. As a result, managed money is long by a stratospheric 13.17:1, up dramatically from the previous week of 7.66:1 and the ratio two weeks ago of 9.22:1.

As this report is being compiled on September 12 the December contract is trading $9.40 lower on the day and has made a low of 1324.10, which is the lowest print since 1328.70 made on September 6. On September 7, OIA announced that December gold generated a short term buy signal, but it now appears likely that this signal is going to reverse.

For short term sell signal to occur the high of the day must be below OIA’s key pivot point for September 12 of $1329.40. The rally will resume if the December contract makes a daily low above OIA’s pivot point for September 12 of 1344.90. With managed money holding a huge net long position, the largest since early July when the December contract topped at 1384.40, the gold market is vulnerable to long liquidation and likely to test the low for the move of 1305.50 made on September 1.We strongly recommend a stand aside posture.

Silver:

December silver lost 31 cents on volume of 56,536 contracts. Total open interest declined by 278 contracts, which relative to volume is approximately 75% below average. The COT report for silver showed that managed money added 5,848 to their long positions and liquidated 1,541 of their short positions. Commercial interests liquidated 363 of their long positions and added 2,189 to their short positions.

As a result, managed money is long silver by ratio of 5.20:1, up from the previous week of 4.53:1, but down from the ratio two weeks ago of 5.71:1. Notice the discrepancy in the long ratios between gold and silver. Managed money is far more bullish on gold than silver despite on a year-to-date basis silver is out performing gold.

As this report is being compiled on September 12, the December contract is trading sharply lower, down 44.3 cents or -2.29% versus gold trading -0.73%. The December contract has made a daily low of $18.765 and it appears likely it is going to test the low for the move of 18.440 made on August 25. For the December contract to generate a short term sell signal, which would reverse the September 7 short term buy signal, the high of the day must be below OIA’s keep pivot point for September 12 of $19.049. Stand aside.

Canadian dollar: On September 12, the September and December Canadian dollar will generate short and intermediate term sell signals.

S&P 500 E-mini: The September S&P 500 E-mini will generate a short term sell signal on September 12 provided the daily high remains below OIA’s key pivot point for September 12 of 2163.96. It remains on intermediate term buy signal.