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This report will be late and somewhat truncated due to the exchange releasing its volume and open interest numbers very late. I want to get the necessary information to subscribers as soon as possible.
Soybeans:
August soybeans lost 49.25 cents on volume of 318,532 contracts. Open interest declined a massive 18,376 contracts. Relative to volume, the open interest decline was at the very high end of the range. Yesterday at the top of the report, I mentioned that I wanted to see a hefty decline in open interest for the grains. Volume on the decline over the past two sessions, has been relatively light considering the magnitude of the decline and the decrease of open interest. During the past two days, August soybeans have declined $1.08 1/4 and open interest has declined by a total of 24,817 contracts. As I write this on July 25, August soybeans are trading 41.00 cents higher. Stand aside.
Soybean meal:
August soybean meal lost $13.20 on volume of 114,869 contracts. Open interest declined by 4,198 contracts and relative to volume, the open interest decrease was relatively heavy, but significantly below soybeans. As I write this on July 25, August soybean meal is trading near limit up of $19.20. Stand aside.
Corn:
September corn lost 24.00 cents on volume of 344,674 contracts. Open interest increased by 3,660 contracts, which in relation to volume was significantly below average. As I write this on July 25, September corn is trading 6.25 cents higher. Stand aside.
Wheat:
September wheat lost 34.00 cents on fairly heavy volume of 161,954 contracts. Open interest declined by 1,114 contracts, which in relation to volume is significantly below average. During the past two days, September wheat has declined by 64.50 cents and open interest has increased by 1,868 contracts. As I write this on July 25, September wheat is trading 22.00 cents higher.
Crude oil:
September crude oil gained 34 cents on volume of 496,638 contracts. Open interest increased by a whopping 33,673 contracts. Relative to volume, the open interest increase was off the chart. Trading in crude oil on the 24th was unusual because the massive open interest increase did not result in a significant increase in volume, nor was it reflected in a large price gain or decline. Also, the average true range on the 24th was $1.66 versus the 21 day average true range of $2.61. I will need to see more data before I can assess the significance of the massive open interest increase. On July 19, crude oil generated a short-term buy signal and remains on an intermediate term sell signal. Stand aside.
Gasoline:
September gasoline lost 3.80 cents on volume of 153,825 contracts. Open interest declined by 2714 contracts. On July 24, gasoline generated in intermediate term sell signal. As of July 25, gasoline remains on a short-term buy signal. Stand aside.
Copper:
September copper lost 2.70 cents on volume of 59,852 contracts. Open interest increased by 552 contracts, which in relation to volume was significantly below average. Stand aside.
Silver:
September silver lost 23.1 cents on volume of 43,583 contracts. Open interest increased by 934 contracts, which in relation to volume was just a tad below average. Stand aside.
Gold:
August gold lost $1.20 on heavy volume of 207,110 contracts. Volume was the highest since June 29 when 210,340 contracts were traded and gold closed 53.80 higher while open interest increased by 1,620 contracts. Beginning with the July 22 Weekend Wrap and including the reports of July 20 and July 23, I gave my reasons for being friendly to gold. I suggest that readers review these reports in order to understand the reasoning behind the call. The market action of gold on July 23 and 24 convinced me it was on the verge of moving higher. Not only were equities in the tank during this period, but almost all commodities were sharply lower as well. Gold was clearly showing leadership in the face of weakness across the board. This morning, the Wall Street Journal broke news about imminent QE3, or some other such money printing program, which has undoubtedly sparked the current up move. I wrote about the high likelihood of a money printing program in the July 22 Weekend Wrap. As I write this on July 25, August gold is trading $30.70 higher on extremely heavy volume that will exceed the volume on July 24.
Euro:
The September Euro lost 64 points on volume of 241,780 contracts. Open interest declined by 776 contracts and relative to volume, the decline was significantly below average. In the post of July 23, I commented about the anomalous trading in the Euro when it lost 33 points and open interest declined by 10,359 contracts. For the second day in a row on July 24, open interest declined as the Euro made a new low for the move at 1.2051. The open interest action during the past two days indicates that both longs and shorts were liquidating as the market was making new lows. This is unusual. The typical pattern for the Euro during this bear market is that open interest increases as the market makes new lows. The reason I point out anomalous behavior is it often indicates a possible change in direction of the commodity in question.
S&P 500 E mini:
The S&P 500 E mini lost 14.25 points on volume of 2,117,048 contracts. Open interest increased by 12,841 contracts, which in relation to volume was below average. Apple computer had a major earnings miss, and as I write this the stock is down $23.04. Remarkably, sell signals on a short and intermediate term basis will not be generated in Apple on July 25. With the high likelihood that some kind of money printing program is going to be instituted by the Federal Reserve, it is difficult to calibrate the next direction of the market. It is possible that an intermediate term sell signal will be generated on July 25, but the market remains on a short-term buy signal for the S&P 500 E mini. Stand aside.
