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July soybeans closed 18 1/2 cents lower on volume of 289,403 contracts. Open interest increased by 3,123 contracts. For the first time in many months, the volume in soybeans exceeded the volume in corn. The market made a new high at $15.12 1/2 and then reversed to make a low of $14.81, and closed at $14.85. The long-awaited correction appears to be gathering some steam. Speculators should continue to stand aside.
July corn closed 17 1/2 cents lower on volume of 282,733 contracts. Open interest declined for the ninth day in a row by 5,762 contracts bringing the total nine day decline to 137,624 contracts. The market has experienced a great deal of liquidation, and I suspect we are getting close to the end of it. My concern centers around broad market risk, rather than risk in the corn market. Until we get a washout in the outside markets, it will be difficult to calibrate how much more downside there is left in the market. Stand aside.
June crude oil closed 94 cents lower on volume of 596,243 contracts. Open interest declined by 1,705 contracts. The market remains on a short-term sell signal. Stand aside.
June gasoline closed 2.14 cents lower on extremely light volume of 114,064 contracts. Open interest increased for the first time in 10 days by 4,390 contracts. The market made a new low at 3.0600 and closed at 3.0757, which was the lowest close since February 8, 2012. Volume was the lightest since March 12, 2012 when 92,491 contracts were traded. During the past three days, gasoline has declined by a total of 6.88 cents and the average volume for those three days was 129,315 contracts. Decreasing volume on the decline is a positive for the market. Although I think it is premature to implement long positions, the open interest increase of May 2 may be signaling that gasoline is beginning to build bearish sentiment. An increasing build in open interest on a decline to the 50 day moving average of $2.9200 would indicate increasing bearishness. This could set the stage for a summer rally. On May 2, 2011 gasoline closed at 3.3479. Gasoline remains on a short-term sell signal. Stand aside.
July copper close 5.65 cents lower on volume of 54,395 contracts. Open interest declined by 280 contracts. Volume rose by approximately 10,000 contracts from the previous day when copper closed 1.40 cents higher. Since April 24, open interest has declined by a total of 12,036 contracts. As I pointed out in yesterday’s post, the open interest action in copper is abysmal, and although copper is on an intermediate term buy signal, the open interest action has to dramatically improve. The market has not generated a short term buy signal, which would be confirmation to implement long positions. Stand aside.
June gold closed $8.40 lower on volume of 148,109 contracts. Open interest increased by 3,872 contracts. The market is on a short and intermediate term sell signal. Investors should be consulting with their investment advisor or broker about accumulating gold positions for the longer-term.
July silver close 28 1/2 cents lower on light volume of 42,895 contracts. Open interest increased by 581 contracts. The market continues to look terrible. Stand aside.
The June Euro closed 68 points lower on volume of 258,961 contracts. Open interest increased on the decline by 13,911 contracts. The French elections on May 6 will undoubtedly have a major impact on the direction of the Euro. Stand aside.
S&P 500 E mini:
The June S&P 500 E mini closed 3.00 points lower. Open interest declined by 6,867 contracts. Long put protection should be in place.