Soybeans:

January soybeans gained 3 cents on heavy volume of 277,462 contracts. Volume increased by approximately 23,000 contracts from December 12 when soybeans closed 1.50 higher and open interest increased by 4,244 contracts. On December 13, total open interest increased by 11,291 contracts, which in relation to volume is approximately 50% above average. The increase is all the more impressive when considering that January lost 8,725 contracts of open interest. Soybeans have been trading in an irregular fashion for the past several sessions, but the tone of the market has improved. For the past 5 sessions, volume has been above the average daily volume year to date, which shows increasing interest on the part of commercials and speculators. Soybeans have not yet generated a short or immediate term buy signal, and therefore we continue to recommend standing aside.

Soybean meal:

January soybean meal gained $3.30 on heavier than normal volume of 78,759 contracts. Volume was the highest since November 28 when 99,575 contracts were traded while open interest declined by 1,599 contracts and January soybean meal lost 70 cents. On December 13, total open interest increased by 3,234 contracts, which is approximately 55% above average. The increase of total open interest was impressive considering that December and January contracts lost a total of 4,038 of open interest. January meal made a new high for the move at $458.20, which was the highest price for January soybean meal since November 9 when it reached 460.30. As this report is being compiled on December 14, January soybean meal has made a high of $460.30. Soybean meal is getting very close to generating a short-term buy signal. If the daily low in March soybean meal is above $451.80, a short-term buy signal will be generated. For now stand aside.

Corn:

March corn lost 5.25 cents on volume of 236,915 contracts. Volume increased on the decline by approximately 51,000 contracts from December 12 when corn lost 2.25 and open interest declined by 17,848 contracts. On December 13, open interest declined by 5,779 contracts, which in relation to volume is average. At this juncture, there is no reason to be involved in corn.

Wheat:

March wheat lost 3.50 cents on volume of 85,198 contracts. Open interest increased on the decline by 1,396 contracts, relation to volume is approximately 30% less than average. There is no reason to be involved in wheat at this juncture.

Crude oil:

January crude oil lost 88 cents on volume of 494,132 contracts. Open interest declined by 2,109 contracts, which in relation to volume is approximately 75% less than average, which indicates that liquidation was very light on the decline. Since October 24, crude oil has been trading in a sideways pattern, and the market doesn’t have any discernible direction at this juncture. Stand aside.

Natural gas: On December 13, January natural gas generated in intermediate term sell signal.

January natural gas lost 3.5 cents on heavy volume of 548,515 contracts. Volume was the heaviest since October 11 when 792,388 contracts were traded and January natural gas closed at $4.03. On December 13, open interest increased by 9,222 contracts, which in relation to volume is approximately 30% below average. Although sellers were in control on December 13, they were far less aggressive than on December 12 when open interest increased by 12,652 contracts on volume of 467,610. As this report is being compiled on December 14, natural gas has made another new low at 3.261. Stand aside.

Copper:

March copper lost 5.60 cents on volume of 47,101 contracts. Open interest increased on the decline by 690 contracts, which in relation to volume is approximately 35% less than average. After generating a short-term buy signal on December 11, we expected copper to pullback to the $3.6350 area, and yesterdays low was 3.6530. Copper has shown itself to be fairly resistant to major price declines in gold and silver. The pull back on December 13 was a reaction to the over bought condition of the market. When copper generated the buy signal on December 11, we stated it was likely that copper would pull back. As this report is being compiled on December 14, March copper is trading 1.95 higher while gold is approximately unchanged and silver is trading 6 cents lower. One important factor that copper has going for it is  the declining dollar, which should be supportive for a continued move higher. Although we do not feel strongly about being long copper, if clients are so inclined, the stop should be placed under the December 13 low.

Gold:

February gold lost $21.10 on volume of 182,177 contracts. Volume increased by only 10,000 contracts from December 12 when gold advanced $8.30 and open interest increased by 5,175 contracts. This would suggest that gold longs are not panicking yet. On December 13, open interest declined by 6,578 contracts, which in relation to volume is approximately 40% above average, indicating that those in the market were liquidating in much higher numbers. The trading in gold is been terribly disappointing to the bears, and it appears that there is more downside to come. On December 14, the dollar is sharply lower and gold is unchanged on the day. Gold is on a short-term sell signal, but has not generated in intermediate term sell signal. Stand aside.

Silver:

March silver lost $1.427 on volume of 68,687 contracts. Volume was the highest since November 29 when 78,043 contracts were traded, and March silver closed at $34.431. On December 13, open interest declined by 888 contracts, which in relation to volume is approximately 45% less than average. It is highly likely that silver will generate a short-term sell signal on December 14, but not an intermediate term sell signal. Stand aside.

British pound: Our next report on the British pound will be when it pulls back to a buy point.

The March British pound lost 47 points on volume of 216,569 contracts. Open interest increased by a massive 23,044 contracts, which in relation to volume is approximately 320% above average meaning that longs and shorts were piling into the pound, but the shorts were in control. Despite this, shorts were not able to drive the pound down to a level that would relieved its overbought status. As this report is being compiled on December 14, the pound is trading 65 points higher. Stand aside for now.

Canadian dollar: Our next report on the Canadian dollar will be when it pulls back to a buy point.

The Canadian dollar lost 12 points on volume of 151,097 contracts. Open interest increased by 22,073 contracts, which in relation to volume is approximately 475% above average meaning that sellers and buyers were extremely aggressive, but sellers had the edge. In terms of long positions in currencies that are on buy signals, the Canadian dollar is our least favorite.

Euro:

The December euro lost 5 points on heavy volume of 336,143 contracts. Open interest increased by 1,880 contracts, which in relation to volume is approximately 65% less than average. The euro was able to generate a positive number in total open interest, despite the liquidation in the December contract of 40,629 contracts. As this report is being compiled on December 14, the euro has broken above the December 5 high of 1.3142 and the October 18 high of 1.3155, but has not exceeded the high made on September 17 of 1.3188. We expect the euro to break above this level, and make new highs for the move. Stay with long positions. Move stop loss orders to break even.

S&P 500 E mini:

The S&P 500 E mini lost 9.25 points on heavy volume of 2,918,671 contracts. Volume tends to expand dramatically as the expiration of the nearby S&P contract draws near. Also, open interest tends to be distorted as well. On December 13, open interest increased by 37,082 contracts, which in relation to volume is approximately 45% less than average. As this report is being compiled on December 14, the March E mini is trading approximately unchanged, however, the NASDAQ 100 is trading 16 points lower and Apple Computer is trading near its recent lows. The decision about whether to continue to hold long puts in the E mini should be based upon your risk tolerance and analysis of the fiscal cliff, debt ceiling, and economic issues.