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July corn closed 6 cents lower on volume of 312,759 contracts. Open interest declined by 5,864 contracts. The market made a new low for the move at $6.06 1/2, which was the lowest price for July corn since March 30, 2012. The weakness in corn was apparent on April 17 when the market was unable to break above the high of $6.18 3/4 made on April 16. During the last two days, open interest has declined 7,532 contracts, which is positive. The May-July bull spread narrowed 1/2 cent, but May still sells at a 9 1/2 cent premium to July, which is also positive. Of note is that volume has not increased significantly during the past two days when the market declined a total of 13 1/2 cents. On April 16, May corn generated an intermediate term sell signal. As I mentioned in the post of April 16, I want to see more liquidation before long positions are viable. It looks like a got my wish, because as I write this on April 18, July corn is 10 cents lower. Stand aside for now.
July soybeans closed 7 1/4 cents higher on volume of 235,106 contracts. Open interest increased by a massive 12,825 contracts. July soybeans topped out at $14.53 1/4 on April 10, 2012 and the market reversed to close 5 cents lower on that day. From April 11 through April 17, total open interest has increased by 24,856 contracts, but July soybeans have only advanced 4 1/4 cents higher in this time frame. In other words, the increase in open interest during April 11 through April 17 has pushed soybeans fractionally higher. Although speculators may make up the bulk of buying, someone is on the opposite side of the trade and aggressively shorting the market. This aggressive shorting is acting to cap advances. As I write this on April 18, July soybeans are 15 cents lower.
May crude oil closed $1.27 higher on heavier than normal volume of 676,818 contracts. Open interest declined by a massive 22,261 contracts, which is negative. The range for the day was $2.41, which is 18 cents higher than the 21 day average true range of $2.23. It is interesting to note that the range on April 17 was over 50% greater than the $1.57 range of April 16, but volume on April 17 actually shrank by 10,913 contracts from the volume on April 16. To sum up the action of April 17, crude oil closed significantly higher than the day before, open interest declined massively on the advance, which is bearish, and volume dropped from the previous day, despite having a higher trading range on April 17 than the previous day. This is bearish market action. The market is on the short term sell signal, however, do not short the market. Stand aside.
May gasoline closed 3.30 cents lower on volume of the 185,594 contracts. Open interest increased on the decline by 2,966 contracts. May gasoline has fallen 12.27 cents and open interest has increased by 13,475 contracts. This is bearish market action. On April 17 May gasoline generated a short-term sell signal. Do not short the market. Stand aside.
May copper closed 1.90 cents higher on heavy volume of 97,462 contracts. Open interest declined on the advance by 853 contracts, which is bearish. The market remains on a short-term sell signal, and an intermediate term sell signal has not yet been generated. Please see the April 15 Weekend Wrap for the special report on copper. Stand aside.
June gold closed $1.40 higher on volume of 149,670 contracts. Open interest declined by 2,339 contracts. The market made a low of $1635.20, which was the lowest price for June gold since April 10, but was able to rally from the lows and closed higher.
May silver closed 30 cents higher on volume of 54,088 contracts. Open interest increased by 3,245 contracts. The market is on a short and intermediate term sell signal. Do not short the market. Stand aside.
The June Euro closed 40 points higher on volume of 226,761 contracts. Open interest increased by 3,840 contracts. Open interest has increased along with price for two days row. Although it appears the financial turmoil in Europe and Spain in particular is getting worse, the Euro is steady. The fact that there has been positive price and open interest action is a flag that bearish positions should be avoided, at least for now. Stand aside.
The June Australian dollar closed 54 points higher on light volume of 110,044 contracts. Open interest declined on the rally by 201 contracts. Volume was the lightest since April 9 when 52,204 contracts changed hands. The market continues to act in a bearish fashion and is on a short-term sell signal. In the post of April 16, I listed the points of resistance going back to March 28, which can be used as an exit point for bearish positions. Although the market appears to have reached a bottom temporarily, if economic conditions worsen in China, the Australian dollar will take out the low made on April 11 of 1.0150. For the market to generate intermediate term sell signal, the daily high has to be below 1.0185.
S&P 500 E mini:
The June S&P 500 E mini closed 19.50 points higher on heavy volume of 1,850,386 contracts. Open interest increased by 13,221 contracts. Relative to volume, the open interest increase was minuscule. The trading range on April 17 was 29.50 points and on April 16 the range was 14.75 points. However, volume on April 17 was 109,852 contracts lower than volume on April 16 when the market had a much narrower range and closed down only 1.10 points. To sum up the action on April 17, the market advanced 19.50 points, open interest increased by a minuscule amount and volume dropped 5 1/2% from the previous day. This is bearish. Long put protection should already be in place.