Soybeans:

July soybeans gained 8.75 cents on volume of 196,797 contracts. Total open interest declined by 12,621 contracts, which relative to volume is approximately 150% above average meaning that liquidation was extremely heavy. The May contract accounted for loss of 17,866 of open interest. Despite the rally on April 29, July soybeans remain on a short and intermediate term sell signal. Stand aside.

Corn:

July corn lost 4.75 cents on volume of 236,446 contracts. Open interest declined by a whopping 35,978 contracts, which relative to volume is approximately 410% above average. The May contract accounted for loss of 55,759 contracts. As this report is being compiled on April 29, July corn is trading up the 40 cent limit on fears of late planting. Despite this, corn remains on a short and intermediate term sell signal.

Wheat:

July wheat lost 11.25 cents on volume of 106,919 contracts. Open interest declined by 9,809 contracts, which relative to volume is approximately 250% above average. The May contract accounted for loss of 15,065 contracts. On April 29, the July wheat contract is up sharply due to concerns about damage to the winter wheat crop, and the sharp move higher in corn. Wheat remains on a short and intermediate term sell signal. Stand aside.

Live cattle:

June live cattle lost 30 points on volume of 38,397 contracts. Open interest declined by 695 contracts, which relative to volume is approximately 20% below average. We have received an initial buy signal, but we want to see confirmation before we formally announce a short-term buy signal. Stand aside for now.

Crude oil:

June crude oil lost 64 cents on light volume of 466,803 contracts. Open interest increased by a mere 4,865 contracts, which relative to volume is approximately 50% less than average. Although open interest acted in a bearish fashion since the beginning of the rally, the fact is crude oil has made a high of $94.69 on April 29. This is considerably higher than the 50 and 200 day moving averages of 93.30 and 93.46 respectively. Despite the sharp move higher, crude oil has not yet generated a short or intermediate term buy signal, but it is getting close. Stand aside.

Heating oil: We are suspending reporting on heating oil until we see a trading opportunity.

Gasoline: We are suspending reporting on heating oil until we see a trading opportunity.

Natural gas:

June natural gas gained 2.3 cents on volume of 361,848 contracts. The market made a low of $4.09 and then rebounded to close higher on the day. In previous reports, we indicated that natural gas could correct to $4.08 and possibly to 4.04. As this report is being compiled, natural gas is trading 16.8 cents higher and has made a new high for the move at 4.395. Natural gas remains on a short and intermediate term buy signal. Although it appears that the market wants to go higher, there remains the possibility of a sharp correction caused by a swoon in all markets.

Copper:

July copper lost 5.65 cents on volume of 122,005 contracts. Open interest declined by 4,677 contracts, which relative to volume is approximately 50% above average, meaning that liquidation was heavy. Copper remains on a short and intermediate term sell signal. Stand aside.

Gold:

June gold lost $8.40 on heavy volume of 266,951 contracts. Open interest declined by 3,052 contracts, which relative to volume is approximately 50% below average. The market made a new high for the move at $1484.80, but couldn’t hold the gains and closed lower on the day. As this report is being compiled on April 29, gold is trading $14.20 higher but has not surpassed the high made on April 26. We see the market rallying perhaps to $1496.40. Despite the sharp move higher, gold remains on a short and intermediate term sell signal. Stand aside.

Silver:

July silver lost 39.4 cents on heavy volume of 155,109 contracts. July silver made a new high for the move at $24.835, however the gains couldn’t hold and silver closed lower on the day. Open interest on April 26 declined by a massive 6,832 contracts, which relative to volume is approximately 75% above average meaning that liquidation was extremely heavy. Silver remains on a short and intermediate term sell signal. Stand aside.

Australian dollar:

The June Australian dollar lost 13 points on volume of 91,768 contracts. Open interest declined by 3,674 contracts, which relative to volume is approximately 55% above average. The Australian dollar is rallying on April 29, and has reached the target area for the implementation of bearish positions. Before recommending these, we want to see how open interest performed on April 29.

Euro:

The June euro gained 12 points on light volume of 210,754 contracts. Open interest declined 1,016 contracts, which relative to volume is approximately 75% less than average. On April 29, the euro has rallied 65 points and has made a high of 1.3121. Despite this, the euro remains on a short and intermediate term sell signal. Stand aside.

The June dollar index remains on a short-term sell signal, but an intermediate term buy signal. This suggests continued strength in the euro. Additionally, the June British pound generated a short-term buy signal on April 5, and it is likely to generate an intermediate term buy signal any day now.

S&P 500 E mini:

The S&P 500 E mini lost 5.25 points on volume of 1,342,241 contracts. Open interest declined by 13,078 contracts, which relative to volume is approximately 50% less than average. As this report is being compiled on April 29, the E mini is trading 11.50 points higher and has made a new high for the move at 1592.25 on extremely light volume. The number of stocks trading above their 50 day moving average on April 26 was 1,472, which is below the 50 day moving average of 1,510 and 200 day moving average of 1,536. The market continues to rally despite a poor earnings season and a lackluster economy. Additionally, and most significantly is that the 10 year treasury yield continues to decline, which is indicative of a slowing economy. At some point the disconnect between equities  and the bond market will make a severe readjustment. We encourage clients to protect themselves with long puts as this is very inexpensive insurance.