E-mail comments and questions to: garry@openinterestanalyst.com

Apple Alert: On April 29 in the Weekend Wrap, I performed an analysis of Apple Computer, and determined that Apple had reached a temporary top. Apple is nearing a critical pivot point and is within several points of a possible upside breakout. I will keep readers apprised of any new developments.

Note on Commodities: The strength in the dollar is undermining the entire commodity sector. In the post of May 9, 2012 I wrote that the dollar index had generated a short and intermediate term buy signal. Speculators have to be mindful of the impact of the dollar index on commodities. The index is in a bull market and reached a new high on the 30th, which is the highest price for the index since September 2010.

Soybeans:

July soybeans lost 13 1/2 cents on light volume of 170,244 contracts. Total open interest declined by 3,117 contracts. Open interest in the July contract declined by 5,223 contracts on volume of 86,184 contracts, which is a hefty decline in relation to volume. As documented in previous posts, the July contract has been losing open interest for a couple weeks. The market should find support between the $13.06-$13.28 and below that at the 150 day moving average of $12.81 and the 200 day moving average of $12.88. As I write this on May 31, July soybeans are down 25 1/2 cents. The market remains on an intermediate term buy signal and a short-term sell signal. Stand aside.

Soybean meal:

July soybean meal lost $2.60 on volume of 54,827 contracts. Total open interest declined by 90 contracts and open interest in the July contract declined by 178 contracts on volume of 36,450 contracts. During April 2012 the $386.00 area provided support. Additionally, there should be support at the $370.00-$378.00 area. As I write this on May 31, July soybean meal is down $12.10. The market remains on an intermediate term buy signal and a short-term sell signal. Stand aside.

Corn:

July corn lost 3 cents on volume of 288,574 contracts. Total open interest increased by 1,739 contracts, and open interest in the July contract declined by 8,313 on volume of 148,989 contracts. The decline in open interest in the July contract was offset by an increase of open interest in the September contract of 9,850 contracts on volume of 56,203 contracts. The market made a new low for the move at $5.53 1/2, which was the lowest price for corn since December 8, 2010 when the market made a low of $5.43 1/2. To put the current corn price in perspective, the 104 week moving average of corn on the continuation chart is $6.13 and the 156 week moving average is $5.30. If the market breaks through the low of $5.43 1/2, the next area support will be at the $5.07 area. The market remains on a short and intermediate term sell signal.

Wheat:

July wheat lost 3 cents on volume of 140,762 contracts. Open interest declined by 3,085 contracts, and open interest in the July contract declined by 6,663 contracts on volume of 79,250 contracts. If the market’s daily high is below $6.44 1/4, an intermediate term sell signal will be generated. Stand aside.

Crude oil:

July crude oil declined by $2.94 on fairly light volume of 548,771 contracts. Surprisingly, open interest declined by only 144 contracts. The market made a new low for the move and it was the lowest price for crude oil since October 2011. Ever since the market topped out on May 1, there has been a massive amount of liquidation, and as a consequence, the market has already blown out of large number of speculative longs. From my perspective, the minuscule open interest number indicates that old longs and old shorts were being replaced by new longs and new shorts. The market remains on a short and intermediate term sell signal. Stand aside.

Gasoline:

July gasoline lost 5.96 cents on heavier than normal volume of 177,879 contracts. The open interest decline continued as it has in the previous eight days and 4,893 contracts were liquidated. The market made a new low for the move at $2.7555, which was the lowest price for gasoline since January 2012. The market remains on a short and intermediate term sell signal. Stand aside.

Copper:

July copper lost 7.20 cents on heavier than normal volume of 85,643 contracts. Open interest increased on the decline by 1,351 contracts. The market has been in freefall since May 14 and in that time has not had a decent countertrend rally. Do not chase this market on the short side. Stand aside.

Gold:

August gold closed $14.70 higher on extremely heavy volume of 371,042 contracts. Open interest increased by a minuscule 254 contracts. In the early going, the market traded lower at $1532.10 which was fractionally lower than the low of $1532.80 made on May 23. The market then rallied smartly to close higher on the day. The low open interest number indicates that old longs and shorts were being replaced by new longs and new shorts. It is important that gold holds support at $1523.90, which was the low made on December 29, 2011. During May, gold tested the lows on May 16 of $1529.30, and again on May 23 of $1535.00. In the Weekend Wrap of June 3, I will analyze the ratio of longs to shorts at important lows in the gold market from the Commitment of Traders Report.

Silver:

July silver gained 19.2 cents on volume of 52,568 contracts. Open interest increased by a healthy 2,066 contracts. Market remains on a short and intermediate term sell signal. Stand aside.

Euro:

The June Euro lost 1.08 cents on heavy volume of 386,526 contracts. Surprisingly, open interest declined by a mere 27 contracts. The June contract lost 1,160 contracts of open interest while the September contract gained 1,114 contracts. The market made a new low at $1.2362, which was the lowest price for the Euro since July 2010. From my point of view, the open interest action indicates that old longs and old shorts were liquidating as new longs and new shorts were putting on positions. The market is massively oversold in relation to its 50 day moving average of 1.31. Stand aside. 

S&P 500 E mini:

The June S&P 500 E mini lost 25.00 points on volume of 2,322,061 contracts. Open interest increased on the decline by 23,720 contracts. The market continues to be massively oversold, and therefore a bounce is quite likely, especially if the employment report to be released on June 1 is unexpectedly positive. Maintain long put protection.