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Special Note: Today, June 1, most of the markets are all sharply lower. I will provide an analysis of this day in the upcoming Weekend Wrap, and on Monday, June 4.
July soybeans lost 33 1/4 cents on volume of 228,968 contracts. Volume was the highest since May 23 when soybeans traded a total of 230,575 contracts, and the market closed 19 3/4 cents lower. Total open interest declined by 3,078 contracts, and open interest in the July contract declined by 6,124 contracts on volume of 113,433 contracts. The market made a new low for the move at $13.39 1/2, which was the lowest price for soybeans since March 13, 2012 when July soybeans reached a low of $13.38 3/4. As I mentioned in yesterday’s post, the market should find support in the $13.06-$13.28 area. The market remains on an intermediate term buy signal, but also remains on a short-term sell signal. Stand aside.
July soybean meal closed $15.40 lower on volume of 86,106 contracts. Volume was significantly higher than the average daily volume for May of 67,329 contracts, and higher than year to date average daily volume of 72,456 contracts. The market saw heavy liquidation and open interest declined by 7,978 contracts. The decline in open interest for the July contract was 7,034 contracts on volume of 55,641 contracts. The market remains on an intermediate term buy signal and a short-term sell signal. Stand aside.
July Chicago wheat closed 10 cents lower on total volume of 137,331 contracts. Total open interest declined by 315 contracts and July open interest declined by 4,130 contracts, which was offset by an increase in open interest for the September contract of 4,772. The market has not generated an intermediate term sell signal yet. For this to occur, the daily high must be below $6.44 1/4. Stand aside.
July crude oil lost $1.29 on heavy volume of 646,060 contracts. The market made a new low at $85.86, which was the lowest price for crude oil since October 20, 2011. Volume was the highest since May 16 when crude lost $1.17 and traded 664,792 contracts. As I write this on June 1, July crude is $3.03 lower. The market is on a short and intermediate term sell signal. Stand aside.
July gasoline lost 5.12 cents on volume of 148,676 contracts. Open interest increased by 1,920 contracts. The market made a new low for the move at $2.7195, which was the lowest price for gasoline since December 30, 2011 when the market reached a low of $2.6978. The last time open interest increased was on May 16 and the open interest increase signifies that speculators have now decided to get bearish on gasoline. Interestingly, with the exception of one day during the last couple of weeks, we haven’t seen open interest increase on the massive decline in crude oil. As I write this on June 1, July gasoline is down 7.15 cents. The market is on a short and intermediate term sell signal. Stand aside.
July copper closed 2.45 cents lower on heavy volume of 95,072 contracts. Open interest increased by 2,668 contracts. The market made a new low for the move at $3.3415, which was the lowest price for copper since December 15, 2011 when the market reached a low of $3.2750. As I write this on June 1, copper has fallen another 4.55 cents. Do not chase this market on the short side and do not pick a bottom. Stand aside.
August gold closed $1.50 lower on healthy volume of 192,908 contracts. Open interest declined by 3,336 contracts. As I have pointed out in previous posts, there is support for gold in the $1523.90 to $1532.00 going back to late December 2011. As I write this on June 1, August gold is up $59.60 and the market has not generated a short or intermediate term buy signal as of June 1. For a number of months, I have been suggesting that investors and speculators alike should be consulting with their investment advisors or brokers before they embark upon a program to accumulate gold for the longer-term. I continue to suggest that course of action.
July silver lost 22.6 cents on volume of 51,615 contracts. Open interest increased by 2,075 contracts. As I write this on June 1, July silver is 73.3 cents higher, however gold is outperforming silver on June 1. Stand aside.
The June Euro lost 13 points on heavy volume of 357,681 contracts. The market made a new low for the move at 1.2337, which was the lowest price for the Euro since July 2010. Open interest increased by 2,541 contracts, which in relation to volume is a fairly small increase. For the past two sessions the Euro has lost 1.21 cents and open interest has increased only 2514 contracts. This tells me that both longs and shorts alike are reluctant to take up new positions at these extreme levels. I have been cautioning speculators to stand aside in this market due to the huge number of speculative shorts. As we go into the weekend, anything can happen including a concerted action on the part of the world’s central banks to take drastic action to steady the markets. Stand aside.
S&P 500 E mini:
The June S&P 500 E mini closed essentially unchanged on heavy volume of 2,768,556 contracts. Volume was the highest since May 18 when 2,824,268 contracts were traded and the market closed 10.50 points lower. Open interest declined by 6,216 contracts, which for the most part is essentially an unchanged open interest number. This indicates to me that there were old longs and shorts being replaced by new longs and shorts. As I write this on June 1, the S&P 500 E mini is down 28.50 points. Maintain long put protection, but keep in mind that the world’s central banks are liable to take steps to steady the markets.