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The time frame for this week’s the Commitments Of Traders Report is Wednesday July 23 – Tuesday July 29.

Buy and sell signals are not necessarily points of action, but tend to indicate the bias of the commodity. For more information on how to use our signals, contact openinterestanalyst.com.

From the July 13 Weekend Wrap:

“We have been asked by clients and others when the current carnage in the grain markets will dissipate and the time frame for a bottoming process. We will be discussing individual commodities below, but the grain complex is trading in an environment that we have not seen in recent memory. Remarkably, despite being at new contract lows, soybeans, soybean meal, soybean oil, corn, Kansas City wheat, sugar, cotton have one data point in common: Managed money is net long all of these commodities and in certain cases heavily net long.”

Since we wrote the above paragraph 3 weeks ago, the only change in the net long position of the aforementioned commodities has been soybean oil, when managed money moved to a net short position 2 weeks ago. In order to provide context for the damage that has occurred during the past 3 COT reports weeks we are listing below the agricultural commodities held net long by managed money. The performance stats are from Wednesday, July 9 through Tuesday, July 29 (3 COT reports).

Performance July 9- July 29:

December soybean meal -0.84%, November soybeans -1.90%, October sugar -6.00%, December cotton -7.26%, September Kansas City wheat -7.94%, September corn -9.23%.

Although the loss in soybean meal was fairly minor, the damage in soybeans, sugar, cotton, Kansas City wheat and corn has been significant.Yet managed money remained net long during the past 3 COT reports.This is negative for the above markets because rallies will be met by selling from speculators looking to trim losses. Despite their massively oversold condition, we expect to see tepid rallies followed by more selling. The only exception to this may be Kansas City wheat and soybeans, which are going to be extremely sensitive to the weather in the critical August period.

Soybeans: The action in soybeans and products will be determined primarily by the weather. August is the most critical growing period. Rain means lower prices-hot dry weather, higher prices.

For the week, August soybeans gained 2.75 cents, September -40.25, November -25.00. The COT report revealed that managed money liquidated 988 contracts of their long positions and also liquidated 7,400 contracts of their short positions. Commercial interests liquidated 11,028 contracts of their long positions and also liquidated 6,129 contracts of their short positions. As of the latest report, managed money remains long soybeans by ratio of 1.44:1, which is up from the previous week of 1.33:1 but down from the ratio of 2 weeks ago of 1.47:1.

Soybean meal:

For the week, August soybean meal lost $10.50, September -14.00, December -7.80. The COT report revealed that managed money liquidated 2,139 contracts of their long positions and also liquidated 2,177 contracts of their short positions. Commercial interests added 2,571 contracts to their long positions and also added 1,989 contracts to their short positions. As of the latest report, managed money is long soybean meal by ratio of 2.33:1, which is down from the previous week of 2.40:1, but up from the ratio of 2 weeks ago of 2.13:1.

Soybean oil:

For the week, August soybean oil lost 64 points, September -64, December -54. The COT report revealed that managed money added 1,335 contracts to their long positions and also added 1,338 contracts to their short positions. Commercial interests liquidated 1,246 contracts of their long positions and also liquidated 1,841 contracts of their short positions. As of the latest report, managed money is short soybean oil by ratio of 1.10:1, which is about the same as the previous week of 1.11:1, but a complete reversal from 2 weeks ago when managed money was long soybean oil by ratio of 1.02:1.

Corn:

For the week, September corn lost 10.50 cents, December -9.50, March 2015 -8.50. The COT report revealed that managed money added 4,845 contracts to their long positions and also added 18,732 contracts to their short positions. Commercial interests added 9,019 contracts to their long positions and liquidated 15 contracts of their short positions. As of the latest report, managed money remains long corn by ratio of 1.40:1, which is down from the previous week of 1.50:1 and the ratio of 2 weeks ago of 1.69:1.

Chicago wheat:

For the week, September Chicago wheat lost 3.75 cents, December -6.50, March 2015 -7.50. The COT report revealed that managed money liquidated 3,747 contracts of their long positions and added 15,035 contracts to their short positions. Commercial interests added 8,178 contracts to their long positions and liquidated 3,813 contracts of their short positions. As of the latest report, managed money is short Chicago wheat by ratio of 1.98:1, which is up significantly from the previous week of 1.69:1 and the ratio of 2 weeks ago of 1.60:1.

The current ratio is the highest seen during the bear market in Chicago wheat.

Kansas City wheat:

For the week, September Kansas City wheat advanced 1.50 cents, December -1.75, March 2015 -5.00. The COT report revealed that managed money liquidated 2,427 contracts of their long positions and also liquidated 537 contracts of their short positions. Commercial interests added 1,046 contracts to their long positions and liquidated 986 contracts of their short positions. As of the latest report, managed money is long Kansas City wheat by ratio of 1.52:1, which is down slightly from the previous week of 1.58:1 and the ratio of 2 weeks ago of 1.60:1.

Thus far in the 3rd quarter, December soybean meal is the out performer with a loss of 6.80%, September Chicago wheat – 7.49%, November soybeans -8.53%, December soybean oil -8.79%, September Kansas City wheat -9.64%, September corn -15.82%.

Year to date, December soybean meal is the out performer with a loss of 2.12%, September Kansas City wheat -3.54%, November soybeans -6.74%, December soybean oil -10.88%, September wheat -14.72%, September corn -20.52%.

Cotton:

For the week, December cotton lost 2.08 cents, March 2015 -2.12, May 2015 -2.33. The COT report revealed that managed money added 1,311 contracts to their long positions and also added 2,502 contracts to their short positions. Commercial interests added 6,993 contracts to their long positions and liquidated 1,037 contracts of their short positions. As of the latest report, managed money is long cotton by ratio of 1.21:1, which is down from the previous week of 1.26:1 and the ratio of 2 weeks ago of 1.47:1.

Sugar #11:

For the week, October sugar lost 79 points, March 2015 -57, May 2015 -49. The COT report revealed that managed money liquidated 887 contracts of their long positions and added 19,691 contracts to their short positions. Commercial interests liquidated 2,084 contracts of their long positions and liquidated 23,813 contracts of their short positions.As of the latest report, managed money is long sugar by ratio of 1.15:1, which is down substantially from the previous week of 1.32:1 and the ratio of 2 weeks ago of 1.59:1.

Coffee: On August 1, September coffee generated an intermediate term buy signal after generating a short-term buy signal on July 24.

For the week, September coffee gained 13.20 cents, December +13.30, March 2015 +13.35. The COT report revealed that managed money added 1,347 contracts to their long positions and liquidated 2,823 contracts of their short positions. Commercial interests liquidated 2,888 contracts of their long positions and added 2,444 contracts to their short positions. As of the latest report, managed money is long coffee by ratio of 6.79:1, which is up substantially from the previous week of 4.64:1 and the ratio of 2 weeks ago of 4.18:1, which was the lowest ratio recorded after coffee topped on April 23.

It is important to note that the major increase in this week’s ratio was due to the liquidation of short positions rather than the addition of long positions.

On July 31, coffee made a new high for the move at 1.9640, and on August 1 made another new high at $2.0740, which is the highest print since May 7 (2.0945).The two-day move was astounding in its magnitude, and after making the new high on August 1, sold off dramatically to close at 1.9235..

In the July 24 report, OIA recommended the initiation of the small bullish position and despite a lower close on August 1, clients should have a significant profits. The market clearly got ahead of itself, and as we said in prior reports, coffee has been overdue for correction. The action on August 1 likely signifies further downside ahead. Ultimately though, we think coffee prices are headed higher, perhaps significantly so. In any event, do not let this winning trade turn into a losing trade. If the market moves to a level that is close to your purchase price, liquidate the position rather than ride it out. Corrections in coffee can be vicious.

From the July 27 Weekend Wrap:

“We are highly enthusiastic about the coffee trade and think it offers the best chance of an out sized gain compared to any other commodity traded. On Friday, the September contract closed at 1.7915, which is the highest weekly close since May 19 when September coffee closed at 1.8190.In the July 24 report written on July 25, OIA recommended the initiation of a small bullish position, even though the market had not had its pullback, which is typical after the generation of a buy signal.”

Cocoa:

For the week, September cocoa gained $13.00, December + 31.00, March 2015 +21.00. The COT report revealed that managed money added 5,247 contracts to their long positions and also added 3,438 contracts to their short positions.Commercial interests liquidated 1,319 contracts of their long positions and also liquidated 1,226 contracts of their short positions. As of the latest report, managed money is long cocoa by ratio of 3.62:1, which is down from the previous week of 3.92:1 and the ratio of 2 weeks ago of 3.84:1.

Thus far in the 3rd quarter, September coffee is the out performer with a gain of 9.85%, September cocoa +2.56%, October sugar -9.22%, December cotton -13.93%.

Year to date, September coffee is the out performer with a gain of 64.19%, September cocoa +17.52%, October sugar -4.11%, December cotton -19.33%.

Live cattle:

For the week, August cattle lost 1.80 cents, October -3.80, December -2.35. The COT report revealed that managed money liquidated 1,024 contracts of their long positions and added 2,037 contracts to their short positions. Commercial interests added 1,584 contracts to their long positions and also added 2,478 contracts to their short positions. As of the latest report, managed money remains long live cattle by ratio of 6.92:1, which is down substantially from the previous week of 7.91:1 and the ratio of 2 weeks ago of 11.21:1.

The current ratio is the lowest since January 7, 2014 when managed money was long live cattle by ratio of 6.44:1.The trading range encompassed by the January 7 COT report was from 1.34850-1.37225, or approximately 20 cents below current prices. More to the point, in the January 7 COT report managed money was net long by 99,425 contracts and by July 29, net long by 102,387 contracts. We expect the net long position of manage money will decline in next week’s COT report. This sets up a very healthy market condition for an eventual test of the all-time highs. In the meantime, October cattle could decline to its 50 day moving average of 1.51000 and keep its uptrend intact. Likely, a short-term sell signal would be generated if this were to occur. However, the bull move in cattle is by no means over in our view.

Lean hogs: On July 30, October logs generated an intermediate term sell signal after generating a short-term sell signal on July 24.

For the week, August lean hogs lost 5.60 cents, October -4.45, December -3.75. The COT is report revealed that managed money liquidated 2,357 contracts of their long positions and also liquidated 2,060 contracts of their short positions. Commercial interests added 2,192 contracts to their long positions and liquidated 1,894 contracts of their short positions. As of the latest report, managed money remains long lean hogs by ratio of 6.08:1, which is up substantially from the previous week of 5.29:1, but about the same as the ratio of 2 weeks ago of 6.16:1.

The reason for the increase in this week’s ratio was primarily due to the liquidation of short positions. Note that the ratio between cattle and hogs has narrowed considerably even though the recent performance of lean hogs has been dismal compared to live cattle. It appears that managed money is far too bearish on cattle and overly bullish on hogs.

Thus far in the 3rd quarter, October live cattle is the out performer with a gain of 1.65%, December live cattle +1.54%, December lean hogs-4.26%, October lean hogs -9.72%.

Year to date, October lean hogs is the out performer with a gain of 22.78%, October live cattle +18.99%, December lean hogs +18.74%, December live cattle +18.66%.

WTI crude oil: On July 30, September WTI crude oil generated an intermediate term sell signal after generating a short-term sell signal on July 3.

For the week, September WTI crude oil lost $4.21, October -3.93, November – 3.76. The COT report revealed that managed money added 5,190 contracts to their long positions and also added 960 contracts to their short positions. Commercial interests liquidated 20,584 contracts of their long positions and also liquidated 23,489 contracts of their short positions. As of the latest report, managed money remains long WTI crude oil by ratio of 8.14:1, which is down slightly from the previous week of 8.21:1, but up from the ratio of 2 weeks ago of 7.45:1.

During the 2 most recent COT reporting periods (July 22 and July 29), commercial interests have liquidated a total of 54,738 contracts of their long positions and 61,475 contracts of their short positions. During the time frame of the 2 reporting periods, July 16-July 29, September WTI crude oil gained 37 cents.From July 16 through July 22 (July 22 COT report), September WTI crude oil gained $2.86 and yet the report showed commercials liquidated 34,154 contracts of long positions and 37,986 contracts of short positions.

During these 2 COT reporting periods, managed money did little in the way to change their overall net long position. If the changes of the 2 reports are added together, managed money has liquidated only 2,165 contracts of their long positions and 3,724 contracts of their short positions.In short, managed money is the most potent force for fueling a downside move.On Friday, September WTI made a low of 97.09, which is the lowest print since May 7 of 96.98. During July 30 and 31, open interest declined only 11,401 contracts while September WTI lost $2.80.Preliminary stats for Friday’s trading show a minor open interest decline of 1,077 contracts when September crude lost 29 cents.

September WTI crude oil is massively oversold relative to its 20 day moving average of $101.33 and the 50 day moving average of 102.58, and a decent size rally should be expected. Additionally, the September 2014-December 2014 spread still shows September selling at a $2.19 premium to December. This has declined from the recent high of 3.17 on July 23 when September crude oil closed at 103.12. This makes it difficult to get overly bearish at current levels with relatively strong backwardation priced into the term structure of the market.

In the report of July 21, OIA recommended the initiation of short calls, and this trade has worked out well.Continue to hold the position.

The term structure of Brent crude oil is completely the opposite of WTI. For example, the December contract is selling at a $1.40 premium to the September contract. Additionally, Brent made a low of 104.40 on August 1, which is the lowest print since April 7. September Brent crude remains on a short and intermediate term sell signal. Stand aside.

Heating oil:

For the week, September heating oil lost 5.74 cents, October -5.73, November -5.85. The COT report revealed that managed money liquidated 462 contracts of their long positions and added 6,665 contracts to their short positions. Commercial interests liquidated 1,625 contracts of their long positions and added 4,736 contracts to their short positions. As of the latest report, managed money is short heating oil by ratio of 1.24:1, which is up substantially from the previous week of 1.01:1 and a complete reversal from 2 weeks ago when managed money was long heating oil by ratio of 1.41:1.

Gasoline:

For the week, September gasoline lost 9.59 cents, October -8.78, November -8.21. The COT report revealed that managed money liquidated 4,352 contracts of their long positions and also liquidated 860 contracts of their short positions. Commercial interests liquidated 12,448 contracts of their long positions and also liquidated 15,649 contracts of their short positions. As of the latest report, managed money remains long gasoline by ratio of 2.05:1, which is down from the previous week of 2.13:1 and the ratio of 2 weeks ago of 2.52:1.

Natural gas:

For the week, September natural gas gained 1.1 cents, October +2.5, November +3.8. The COT report revealed that managed money liquidated 668 contracts of their long positions and added 10,000 contracts to their short positions. Commercial interests liquidated 4,259 contracts of their long positions and also liquidated 9,379 contracts of their short positions. As of the latest report, managed money is long natural gas by ratio of 1.05:1, which is down from the previous week of 1.10:1 and the ratio of 2 weeks ago of 1.15:1.

Thus far in the 3rd quarter, September ethanol is the out performer with a gain of 1.01%, September heating oil -3.98%, September Brent crude oil -6.77%, September WTI crude oil -6.84%, September gasoline -8.82%, September natural gas -14.59%.

Year to date, September ethanol is the out performer with a gain of 18.24%, September WTI crude oil +3.02%, September gasoline -2.47%, September Brent crude oil -3.05%, September heating oil -4.65%, September natural gas -8.37%.

Copper:

For the week, September copper lost 2.60 cents. The COT report revealed that managed money liquidated 5,775 contracts of their long positions and also liquidated 499 contracts of their short positions. Commercial interests liquidated 208 contracts of their long positions and also liquidated 2,612 contracts of their short positions. As of the latest report, managed money is long copper by ratio of 3.15:1, which is down from the previous week of 3.38:1 and the ratio of 2 weeks ago of 3.79:1.

Palladium:

For the week, September palladium lost $15.25. The COT report revealed that managed money liquidated 132 contracts of their long positions and added 497 contracts to their short positions. Commercial interests liquidated 99 contracts of their long positions and added 1,015 contracts to their short positions. As of the latest report, managed money remains long palladium by ratio of 5.12:1, which is down from the previous week of 5.69:1 and the ratio of 2 weeks ago of 5.58:1.

Platinum: On August 1, October platinum generated a short-term sell signal, but remains on an intermediate term buy signal.

For the week, October platinum lost $15.30. The COT report revealed that managed money liquidated 539 contracts of their long positions and also liquidated 1,186 contracts of their short positions. Commercial interests liquidated 180 contracts of their long positions and also liquidated 361 contracts of their short positions. As of the latest report, managed money is long platinum by ratio of 23.61:1, which is up dramatically from the previous week of 14.49:1 and the ratio of 2 weeks ago of 12.93:1.

The current ratio is the highest recorded of the past couple of months and took out the previous high of 19.69 made 4 weeks ago. The reason for the increase in this week’s ratio was due to the liquidation of a hefty percentage of short positions.October platinum will generate an intermediate term sell signal if the daily high is below 1457.30.Stand aside.

Gold:

For the week, December gold lost $10.50. The COT report revealed that managed money liquidated 12,397 contracts of their long positions and added 4,699 contracts to their short positions. Commercial interests liquidated 753 contracts of their long positions and also liquidated 2,491 contracts of their short positions. As of the latest report, managed money is long gold by ratio of 5.01:1, which is down substantially from the previous week of 6.61:1 and the ratio of 2 weeks ago of 5.49:1.And the ratio of 2 weeks ago of 5.49:1.

Silver: On July 28, September silver generated a short-term sell signal, but remains on an intermediate term buy signal.

For the week, September silver lost 26.5 cents. The COT report revealed that managed money liquidated 4,770 contracts of their long positions and also liquidated 187 of their short positions. Commercial interests added 496 contracts to their long positions and liquidated 799 contracts of their short positions. As of the latest report, managed money remains long silver by ratio of 5.76:1, which is down from the previous week of 6.19:1 and the ratio of 2 weeks ago of 5.88:1.Stand aside.

Thus far in the 3rd quarter, September palladium is the out performer with a gain of 2.61%, September copper +0.48%, October platinum -1.50%, December gold -2.57%, September silver -3.46%.

Year to date, September palladium is the out performer with a gain of 20.06%, December gold +7.40%, October platinum +6.40%, September silver +4.57%, September copper -4.34%.

Canadian dollar: On July 28, the September Canadian dollar generated a short-term sell signal and an intermediate term sell signal occurred on July 31.

For the week, the September Canadian dollar lost 86 pips. The COT report revealed that leveraged funds liquidated 5,073 contracts of their long positions and also liquidated 8,622 contracts of their short positions. As of the latest report, leveraged funds are long the Canadian dollar by ratio of 1.24:1, which is up from the previous week of 1.10:1 and the ratio of 2 weeks ago of 1.04:1.

The reason for the increase in this week’s ratio was due to the substantial liquidation of short positions.

As the extract from last weekend’s report shows, our analysis of the Canadian dollar was spot on and the massive liquidation that occurred during the past week supports OIA’s contention that managed money was massively long at the top of the market. Also, open interest has undergone massive liquidation and for the past 4 days through July 31, the Canadian dollar experienced a massive decline of open interest totaling 9,477 contracts while the September Canadian dollar has declined 62 pips. Although preliminary open interest stats are subject to change, they show an open interest decline of 2,340 contracts. After generating a sell signal on July 28, the Canadian dollar did not have a counter trend rally, which would have enabled clients to initiate bearish positions. Stand aside.

From the July 27 Weekend Wrap:

“Remarkably, managed money managed to get net long at the very top of the move in the Canadian dollar. All during the rally, which began the week of March 24, 2014 until the July 8 COT report, managed money was net short the Canadian dollar. This group of trader assumed a net long position for the first time in the COT report of July 15.On July 3, the September Canadian dollar topped at 93.99 and since then has fallen to a low of 92.29 on July 25. From July 7 through July 24, total open interest has increased by 8,409 contracts while the September Canadian dollar has declined by 1.04 cents.”

“This is bearish open interest action relative to the price decline and is bad news for anyone long the Canadian dollar. However, it is particularly problematic for speculators who rushed into the Canadian dollar at the highest level since January 2014.We expect the September Canadian dollar to generate a short-term sell signal on July 28. The heavy net long position of manage money will fund and add fuel to the downside move.Wait until the short-term sell signal has been generated and after this a counter trend rally lasting 1-3 days before initiating bearish positions. The daily report will provide guidance regarding exit points for bearish positions.”

Australian dollar: On August 1, the September Australian dollar generated a short-term sell signal, but remains on an intermediate term buy signal.The September Australian dollar will generate an intermediate term sell signal if the daily high is below 92.70

For the week, the September Australian dollar lost 78 pips. The COT report revealed that leveraged funds liquidated 3,351 contracts of their long positions and also liquidated 4,581 contracts of their short positions. As of the latest report, leveraged funds are long the Australian dollar by ratio of 2.94:1, which is up substantially from the previous week of 2.57:1 and the ratio of 2 weeks ago of 2.69:1.

The reason for the increase in this week’s ratio was due to the substantial liquidation of short positions.

On July 23, the September Australian dollar closed at 94.16, which was the most recent high close. From July 24 through July 31, total open interest has declined by 13,124 contracts while the September Australian dollar has declined by 1.51 cents. This is healthy open interest action relative to the price decline. This means the Australian dollar will make a bottom sooner than if open interest had increased on the decline. In short, market participants are not fighting the decline,  and this will hasten price discovery. Stand aside.

Swiss franc:

For the week, the September Swiss franc lost 14 pips. The COT report revealed that leveraged funds added 959 contracts to their long positions and also added 3,494 contracts to their short positions. As of the latest report, leveraged funds are short the Swiss franc by ratio of 1.86:1, which is up from the previous week of 1.69:1 and the ratio of 2 weeks ago of 1.64:1.

British pound:

For the week, the September British pound lost 1.44 cents. The COT report revealed that leveraged funds liquidated 598 contracts of their long positions and added 3,625 contracts to their short positions. As of the latest report, leveraged funds are long the British pound by ratio of 2.78:1, which is down from the previous week of 2.99:1 and the ratio of 2 weeks ago of 3.16:1.

On July 25, the September British pound generated a short-term sell signal and will generate an intermediate term sell signal if the high for the day is below OIA’s key pivot point of 1.6826. From July 3 through August 1, the September pound has declined every day with the exception of July 9, July 15 and July 28. In short, the pound has experienced 18 days of declines with only 3 days of advances. From its high close of 1.7153 on July 2 through August 1, the September pound has lost 3.28 cents.From the close of 1.7138 on July 15, before the carnage began through July 31,  total open interest has declined by a healthy 22,281 contracts, or approximately 8.75% of total open interest. In our view, this means the pound will make a bottom sooner than if market participants were fighting the decline, which would only prolong the agony. Stand aside.

Euro:

For the week, the September euro lost 3 pips. The COT report revealed that leveraged funds added 2,381 contracts to their long positions and also added 17,597 contracts to their short positions. As of the latest report, leveraged funds remain short the euro by ratio of 2.35:1, which is up from the previous week of 2.14:1 and the ratio of 2 weeks ago of 1.93:1.

Yen: On July 30, the September yen generated a short and intermediate term sell signal.

For the week, the September yen lost 73 pips. The COT report revealed that leveraged funds added 731 contracts to their long positions and also added 13,452 contracts to their short positions.As of the latest report, leveraged funds are short the yen by ratio of 4.32:1, which is up substantially from the previous week of 3.17:1, but below the ratio of 2 weeks ago of 5.01:1.Stand aside.

Dollar index:

For the week, the September dollar index gained 25 points. The COT report revealed that leveraged funds added 12,405 contracts to their long positions and also added 16,432 contracts to their short positions. As of the latest report, leveraged funds are short the dollar index by ratio of 1.36:1, which is down slightly from the previous week’s ratio of 1.39:1 and the ratio of 2 weeks ago of 1.45:1.

Thus far in the 3rd quarter, the September dollar index is the out performer with a gain of 2.00%, Australian dollar -0.97%, September yen -1.26%, September British pound -1.58%, September euro -1.96%, September Swiss franc -2.16%, September Canadian dollar -2.24%.

Year to date, the September Australian dollar is the out performer with a gain of 5.79%, September yen +2.49%, September British pound +1.78%, September dollar index +1.11%, September Swiss franc -2.08%, September Canadian dollar -2.16%, September euro -2.63%.

S&P 500 (250 x):

For the week, the September S&P 500 futures contract lost 52.90 points. The COT report revealed that leveraged funds added 1,615 contracts to their long positions and also added 189 contracts to their short positions. As of the latest report, leveraged funds are short the S&P 500 futures contract by a ratio of 1.28:1, which is down from the previous week of 1.48:1 and down substantially from the ratio of 2 weeks ago of 2.16:1.

Thus far in the 3rd quarter, the NASDAQ 100 cash index is the out performer with a gain of 0.78%, S&P 500 cash index -1.79%, Dow Jones Industrial Average cash index -1.98%, New York Composite cash index -2.62%, S&P 400 cash index -4.59%, Russell 2000 cash index -6.55%.

Year to date, the NASDAQ 100 cash index is the out performer with a gain of 8.01%, S&P 500 cash index +4.15%, New York Composite cash index +2.81%, S&P 400 cash index +1.84%, Dow Jones Industrial Average cash index -0.50%, Russell 2000 cash index -4.19%.

10 year Treasury Note: On July 31, the September 10 year treasury note generated a short-term sell signal, which reversed the short-term buy signal of July 23. The 10 year note remains on an intermediate term buy signal.

We have reprinted last week’s commentary on the 10 year note because we thought the buy signal could easily reverse, which in retrospect it did. Also, we stated if the September note could not make a daily low above 125-09 the market would trade sideways to lower.It did this as well. For the September 10 year note to reverse the sell signal, the daily low must be above OIA’s key pivot point of 125-095. We have no recommendation due to the chop of the market. Stand aside.

From the July 27 Weekend Wrap:

“10 year Treasury Note: On July 23, the September 10 year Treasury Note generated a short-term buy signal and remains on an intermediate term buy signal.”

“If the September note is to continue its advance, it must make a daily low above 125-09.  If it is unable to accomplish this, the market will trade sideways to lower. Despite the short-term buy signal, we have no recommendation to make, because we think the market could reverse course.”