Soybeans:

July soybeans gained 27 cents on volume of 196,200 contracts. Open interest declined a massive 10,908 contracts, which relative to volume is approximately 120% above average, meaning that liquidation was extremely heavy on the advance. The May contract accounted for loss of 2,294 of open interest, which means that liquidation also was occurring in the July 2013 forward contracts. During the past 2 trading sessions beginning on March 24, soybeans have advanced 13.75 cents while open interest has declined 18,890 contracts. This is bearish. Soybeans remain on a short and intermediate term sell signal. Stand aside.

Corn:

July corn gained 6.25 cents on volume of 203,522 contracts. Open interest declined by a massive 10,048 contracts, which relative to volume is approximately 100% above average, meaning that liquidation was extremely heavy. The May contract accounted for loss of 15,966 of open interest. During the past 2 days, July corn advanced 10.50 cents while open interest has declined 13,992 contracts. This is bearish. Corn remains on a short and intermediate term sell signal. Stand aside.

Wheat:

July wheat gained 11.75 cents on volume of 103,929 contracts. Open interest declined 2,782 contracts, which relative to volume is average. The May contract accounted for loss of 5,607 of open interest. Wheat remains on a short and intermediate term sell signal. Stand aside.

Crude oil:

June crude oil gained $2.21 on volume of 560,626 contracts. Open interest increased only 6,522 contracts, which relative to volume is approximately 50% below average. Remarkably, despite the 2nd largest increase in the price of crude for calendar year 2013, volume could not exceed the average daily volume year to date of 568,043 contracts. From the April 24 report: “Remarkably, crude oil had the largest daily advance in price since the beginning of 2013, yet open interest increased at an average rate and volume was below the average daily volume year to date of 568,043 contracts.” On April 25, Brent crude oil advanced $1.68 on volume of 780,811 contracts, which is the highest volume since April 18 when 829,449 contracts were traded. Despite the relatively low volume on April 25, open interest in Brent skyrocketed by 47,675 contracts, which relative to volume is approximately 140% above average, meaning that new longs were heavily entering the market and driving prices higher. The large increase of open interest in the Brent contract compared to WTI is something that bears watching. Perhaps the narrowing of the spread between WTI and Brent is coming to an end, and that Brent is going to reassert its leadership. Both WTI and Brent remain on short and intermediate term sell signals. Stand aside.

Heating oil:

June heating oil gained 5.21 cents on volume of 147,399 contracts. Open interest declined by 3,519 contracts, which relative to volume is average. Heating oil remains on a short and intermediate term sell signal. Stand aside.

Gasoline:

June gasoline gained 5.88 cents on light volume of 132,571 contracts. Open interest declined by a massive 9,752 contracts, which relative to volume is approximately a massive 185% above average, meaning that liquidation was extraordinarily heavy as gasoline prices advanced. This is bearish. Gasoline remains on a short and intermediate term sell signal. Stand aside.

Natural gas:

June natural gas closed unchanged on light volume of 354,942 contracts. Open interest declined by 13,552, which relative to volume is approximately 50% above average, meaning that liquidation was heavy. For the past 5 days beginning on April 19, open interest has declined 40,000 contracts while June natural gas is declined. 23.4 cents. This is bullish open interest action relative to the price decline. As this report is being compiled on April 26, natural gas is trading 7.2  cents lower and has made a new low for the move at $4.090. Natural gas remains on a short and intermediate term buy signal. As we indicated in prior reports, the market is correcting, which is healthy for natural gas. Our target on the downside has been $4.04-4.08.

Copper:

May copper advanced 8 cents on volume of 133,022 contracts. Open interest declined by 4735 contracts, which relative to volume is approximately 40% above average, meaning that liquidation was heavy on the large price advance. Copper made a new high for the move at $3.2590 on April 25, and made another new high of $3.2820 on April 26. As this report is being compiled on April 26, copper is trading 4.65 cents lower. The market is extremely volatile, which makes it dangerous to trade futures, and the options market lacks liquidity. For these reasons, we recommend a stand aside position even though we think copper is going lower. Another way to play the bear market in copper is to implement bearish positions in copper mining companies.

Gold:

June gold gained $38.30 on volume of 211,382 contracts. Remarkably, volume was lighter on the 24th than April 23 when gold declined $12.40 and volume was 239,497 contracts. In other words, gold had a move that was 3 times greater on the upside than the move on the downside, yet volume could not match, nor exceed the volume of April 23. This is another indication that over all demand by the vast universe of potential buyers is weak. However, open interest increased by a healthy 8,727 contracts, which relative to volume is approximately 55% above average, meaning new longs were pushing prices higher and willing to add new positions at the high-end of gold’s very recent trading range. Despite the move higher, gold remains on a short and intermediate term sell signal. 

Silver:

May silver advanced a massive $1.307 on volume of 114,469 contracts. Interestingly, the volume in silver on April 25 was only approximately 7000 contracts above April 24 when silver gained 1.6 cents and open interest declined 1,567 contracts. Additionally, volume was greater on April 23 when silver declined 50.7 cents on volume of 115,200 contracts and open interest increased 1,706 contracts. In short, the action on April 25 was unimpressive from a price and volume standpoint. To add insult to injury, open interest declined on the massive price advance by 2,415 contracts, which relative to volume is 20% below average, but a very bearish number considering the magnitude of the advance. Silver remains on a short and intermediate term sell signal.

Australian dollar:

The Australian dollar gained 12 points on volume of 83,199 contracts. Open interest declined by 2,099 contracts, which relative to volume is average. On April 23, the June Australian dollar generated a short and intermediate term sell signal. The Australian dollar reached 1.0301, which is the target price for the implementation of bearish positions. The Australian dollar has been trading in a bearish fashion, and looks to decline in the coming weeks.

Euro:

The June euro lost 6 points on volume of 271,747 contracts. Open interest increased by 1,601 contracts, which relative to volume is approximately 65% less than average. Those clients that shorted the June euro based upon our previous recommendation were stopped out on April 25 if they exited at our recommended point of 1.3090. The high on April 25, was 1.3098. The euro remains on a short and intermediate term sell signal, and we continue to recommend the bearish side of the euro and a buy stop can be placed above the April 25 high.

S&P 500 E mini:

The S&P 500 E mini gained 7.25 points on volume of 1,609,437 contracts. Open interest increased by 32,251 contracts, which relative to volume is approximately 25% below average. This was the largest open interest increase since March 20, when open interest increased by 48,813 contracts on volume of 1,804,283 contracts and the E mini advanced 6.75 points. Although we think the market can go higher, in our view, the risk is to the downside. Therefore, put protection should be in place, especially if clients have equity holdings.