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The time frame for the current Commitments of Traders report is from Wednesday, May 27 through Tuesday, June 2.

On June 5, the S&P 500, Dow Jones Industrial Average and the New York Composite cash indices generated short term sell signals. The NASDAQ 100, Russell 2000 and S&P 400 cash indices did not generate short-term sell signals on June 5. The June S&P 500 E mini came close, but we expect this to occur either Monday or Tuesday of this week. We think the market is rolling over and as a consequence, there is a terrific opportunity to make money on the bearish side. We provide the technical analysis at the end of the report.

Soybeans:

For the week, July soybeans advanced 3.75 cents, August +5.25, new crop November +8.50. The COT report revealed that managed money added 5,897 to their long positions and liquidated 1,139 contracts of their short positions. Commercial interests added 11,325 contracts to their long positions and also added 28,160 to their short positions. As of the latest report, managed money is short soybeans by ratio of 2.13:1, which is down from the previous week of 2.34:1 (the high short ratio thus far in the bear market) and about the same as the ratio of two weeks ago of 2.14:1.

Soybean meal:

For the week, July soybean meal lost 80 cents, August -50, new crop December – $1.00. The COT report revealed that managed money added 1,359 contracts to their long positions and also added 394 to their short positions. Commercial interests added 1,986 to their long positions and also added 4,193 to their short positions. As of the latest report, managed money is short soybean meal by a ratio of 1.14:1, which is down slightly from the previous week of 1.16:1 and the ratio of two weeks ago 1.15:1.

Soybean oil:

For the week, July soybean oil gained 1.45 cents, August +1.44, new crop December +1.50. The COT report revealed that managed money added 9,815 contracts to their long positions and liquidated 20,361 contracts of their short positions.Commercial interests liquidated 2,490 of their long positions and added 34,872 to their short positions. As of the latest report, managed money is long soybean oil by ratio of 3.15:1, which is nearly double the ratio of the previous week of 1.60:1 and the ratio two weeks ago of 1.59:1.

The current ratio of 3.15:1 is the highest recorded during 2015.

Corn:

For the week, July corn advanced 9.00 cents, September +10.25, new crop December +10.00. The COT report revealed that managed money added 2,902 contracts to their long positions and also added 2,489 to their short positions. Commercial interests added 2,292 to their long positions and also added 6,266 to their short positions. As of the latest report, managed money is short corn by a ratio of 1.71:1, which is down fractionally from the previous week of 1.72:1 and the high ratio thus far in the bear market of 1.73:1 recorded two weeks ago.

Chicago wheat:

For the week, July Chicago wheat advanced 40.00, September +39.25, new crop December +36.00. The COT report revealed that managed money added 2,649 contracts to their long positions and liquidated 9,095 other short positions. Commercial interests liquidated 5,143 of their long positions and added 6,629 to their short positions. As of the latest report, manage money is short Chicago wheat by a ratio of 2.16:1, which is down from the previous week of 2.40:1 and down fractionally from the ratio of two weeks ago of 2.17:1. Three weeks ago, managed money was short by a record 3.14:1.

Kansas City wheat:

For the week, July Kansas City wheat advanced 36.50 cents, September +38.25, new crop December +38.50. The COT report revealed that managed money liquidated 2,348 contracts of their long positions and added 2,247 to their short positions. Commercial interests added 1,357 to their long positions and liquidated 2,025 of their short positions. As of the latest report, managed money is short Kansas City wheat by a ratio of 1.01:1, which is a reversal from the previous week when they were long by a ratio of 1.14:1. Two weeks ago, managed money was short Kansas City wheat by a ratio of 1.03:1.

Year to date, July soybean oil is the out performer with a gain of 6.85%, July soybeans -9.57%, July soybean meal -10.14%, July corn -12.61%, July Chicago wheat -13.47%, July Kansas City wheat -15.81%.

Thus far in the second quarter, July soybean oil is the out performer with a gain of 13.59%, July Chicago wheat +0.58%, July soybeans -4.09%, July Kansas City wheat -5.06%, July corn -6.18%, July soybean meal -6.24%.

Cotton:

For the week, July cotton lost 34 points, new crop December -9, March 2016 +12. The COT report revealed that managed money liquidated 7,250 of their long positions and also liquidated 2,694 of their short positions. Commercial interests added 4,289 to their long positions and liquidated 932 contracts of their short positions. As of the latest report, managed money is long cotton by a ratio of 1.61:1, down from the previous week up 1.69:1 and substantially below the ratio of two weeks ago of 2.54:1.

Sugar #11:

For the week, July sugar advanced 7 points, October +14, March 2016 +16. The COT report revealed that managed money added 4,139 contracts to long positions and also added 4,578 to their short positions. Commercial interests liquidated 103 contracts of their long positions and also liquidated 5,965 of their short positions. As of the latest report, managed money is short sugar by ratio of 1.42:1, which is down slightly from the previous week of 1.43:1, but up from the ratio of two weeks ago of 1.20:1.

Coffee:

For the week, July coffee advanced 8.95 cents, September +8.80, December +8.60. The COT report revealed that managed money added 127 contracts to long positions and liquidated 1,477 of their short positions. Commercial interests liquidated 2,176 of their long positions and also liquidated 697 contracts of their short positions. As of the latest report, managed money a short coffee by ratio of 1.56:1, which is down from the high short ratio of the previous week of 1.61:1, but up from the ratio of two weeks ago of 1.15:1.

Cocoa:

For the week, July cocoa advanced $31.00, September +35.00, December +36.00. The COT report revealed that managed money added 1,318 to long positions and also added 594 contracts to their short positions. Commercial interests liquidated 1,181 of their long positions and added 2,166 to their short positions. As of the latest report, managed money is long cocoa by a ratio of 2.67:1 which is down fractionally from the previous week of 2.68:1 and the ratio of two weeks ago of 2.69:1.

Year to date, July cocoa is the out performer with a gain of 7.86%, July cotton +3.24%, July sugar -20.98%, July coffee -21.41%.

Thus far in the second quarter, July cocoa is the out performer with a gain of 15.45%, July cotton +0.87%, July sugar -0.08%, July coffee -0.73%.

Live cattle:

For the week, August live cattle lost 70 points, October -55, December -42. The COT report revealed that managed money added 1,516 to long positions and also added 514 contracts to their short positions. Commercial interests added 77 contracts to long positions and liquidated 1,858 of their short positions. As of the latest report, managed money is long live cattle by a ratio of 8.24:1, which is down from the previous week of 8.46:1 and substantially below the high ratio of 9.82:1 made two weeks ago.

Lean hogs: On June 4 August lean hogs generated a short term sell signal, but remain on intermediate term buy signal.

For the week, August lean hogs lost 1.68 cents, October -2.20, December -2.02. The COT report revealed that managed money added 1,547 to long positions and also added 1,018 to their short positions. Commercial interests added 1,872 to long positions and also added 2,935 to their short positions. As of the latest report, managed money is long lean hogs by ratio of 1.76:1, which is down fractionally from the previous week of 1.77:1 and below the recent high ratio of 1.90:1 made two weeks ago.

Year to date, October live cattle is the out performer with a loss of 1.07%, August live cattle -1.28%, October lean hogs -8.86%, August lean hogs -10.37%.

Thus far in the second quarter, August lean hogs is the out performer with a gain of 3.89%, October lean hogs +1.04%, October live cattle +0.74%, August live cattle +0.50%.

WTI crude oil:

For the week, July WTI crude oil lost $1.17, August -1.04, September -90 cents. The COT report revealed that managed money liquidated 11,800 contracts of their long positions and also liquidated 5,307 of their short positions. Commercial interests added 1,215 contracts to their long positions liquidated 3,310 of their short positions. As of the latest report, managed money is long WTI crude oil by a ratio of 5.08:1, which is an increase from the previous week of 4.85:1 and the ratio of two weeks ago of 4.67:1. Three weeks ago, managed money was long by the record ratio for 2015 of 5.19:1.

Heating oil:

For the week, July heating oil lost 8.01 cents, August -7.82, September -7.57. The COT report revealed that managed money liquidated 3,591 of their long positions and also liquidated 2,223 of their short positions. Commercial interests liquidated 7,544 of their long positions and also liquidated 3,707 of their short positions. As of the latest report, managed money is short heating oil by a ratio of 1.17:1, which is above the previous week of 1.11:1 and the ratio of two weeks ago of 1.13:1.

Gasoline:

For the week, July gasoline lost 3.27 cents, August -3.31, September -3.73. The COT report revealed that managed money added 1,740 to their long positions and liquidated 2,129 contracts of their short positions. Commercial interests liquidated 18,578 contracts of their long positions and also liquidated 13,625 of their short positions. As of the latest report, managed money is long gasoline by a ratio of 1.68:1, which is up from the previous week of 1.55:1 and the ratio of two weeks ago of 1.61:1.

Natural gas:

For the week, July natural gas lost 5.2 cents, August -4.4, September -4.3. The COT report revealed that managed money liquidated 220 contracts of their long positions and added a massive 60,190 contracts to their short positions. Commercial interests liquidated 2,496 of their long positions and also liquidated 9,156 of their short positions. As of the latest report, managed money is short natural gas by a ratio of 1.72:1, which is up substantially from the previous week of 1.44:1 and the ratio of two weeks ago 1.36:1.

The current ratio of 1.72:1 is slightly below the record high short ratio of 1.75:1 made in the May 12, 2015 COT report.

Year to date, July gasoline is the out performer with a gain of 16.59%, July Brent crude oil +9.64%, July WTI crude oil +4.60%, July heating oil +1.83%, July ethanol -4.98%, July natural gas -14.11%.

Thus far in the second quarter, July gasoline is the out performer with a gain of 16.06%, July WTI crude oil +15.89%, July Brent crude oil +14.23%, July heating oil +7.78%, July ethanol +3.97%, July natural gas -5.96%.

Copper:

For the week, July copper lost 3.55 cents. The COT report revealed that managed money liquidated 16,481 contracts of their long positions and added 7,576 to their short positions. Commercial interests added 409 contracts to long positions and liquidated 11,592 of their short positions. As of the latest report, managed money is long copper by a ratio of 1.14:1, which is a dramatic drop from the previous week of 2.19:1 and the ratio of two weeks ago of 2.88:1. Three weeks ago, managed money was long copper by a record high ratio for 2015 of 3.17:1.

Palladium:

For the week, September palladium lost $26.15. The COT report revealed that managed money added 650 contracts to their long positions and also added 372 to their short positions. Commercial interests liquidated 654 contracts of their long positions and also liquidated 1,583 of their short positions.As of the latest report, managed money is long palladium by a ratio of 6.30:1, which is down from the previous week of 6.94:1, but up from the ratio of two weeks ago of 5.80:1.

Platinum:

For the week, July platinum lost $19.50. The COT report revealed that managed money liquidated 166 contracts of their long positions and added 5,301 to their short positions. Commercial interests added 604 contracts to their long positions and liquidated 762 of their short positions. As of the latest report, managed money is long platinum by a ratio of 1.56:1, which is down from the previous week of 2.06:1 and the ratio of two weeks ago of 2.24:1.

Gold: On June 3, August gold generated a short term sell signal after generating an intermediate term sell signal on May 27.

For the week, August gold lost $21.70. The COT report revealed that managed money added 160 contracts to their long positions and also added 4,657 to their short positions. Commercial interests liquidated 495 contracts of their long positions also liquidated 1,302 of their short positions. As of the latest report, managed money is long gold by a ratio of 1.97:1, which is down from the previous week of 2.13:1 and the ratio two weeks ago of 2.46:1.

Silver: On June 5, July silver generated short and intermediate term sell signals.

For the week, July silver lost 71.7 cents. The COT report revealed that managed money liquidated 4,324 contracts of their long positions and added 1,324 to their short positions. Commercial interests added 220 contracts to their long positions and liquidated 1,887 of their short positions. As of the latest report, managed money is long silver by a ratio of 4.12:1, which is down from the recent record high ratio of 5.05:1 made the previous week, and also below the ratio of two weeks ago of 4.60:1.

Year to date, July silver is the out performer with a gain of 2.61%, August Gold -1.26%, July copper -4.55%, September palladium -6.08%, July platinum -9.73%.

Thus far in the second quarter, September palladium is the out performer with a gain of 1.98%, August Gold -1.11%, July copper -1.62%, July silver -3.68%, July platinum -4.45%.

Canadian dollar:

For the week, the June Canadian dollar advanced 2 pips. The COT report revealed that leverage funds liquidated 1,647 contracts of their long positions and added 7,136 to their short positions. As of the latest report, leverage funds are short the Canadian dollar by a ratio of 1.33:1, which is a reversal from the previous week when they were long by a ratio of 1.18:1. Two weeks ago, leverage funds were short the Canadian dollar by a ratio of 1.03:1. 

Australian dollar:

For the week, the June Australian dollar lost 33 pips. The COT report revealed that leverage funds liquidated 1,606 contracts of their long positions and added 8,867 to their short positions. As of the latest report, leverage funds are short the Australian dollar by a ratio of 2.06:1, which is up from the previous week of 1.47:1 in the ratio of two weeks ago of 1.39:1.

Swiss Franc:

For the week, the June Swiss franc gained 4 pips. The COT report revealed that leverage funds added 1,369 contracts to their long positions and also added 1,236 to their short positions. As of the latest report, leverage funds are long the Swiss franc by a ratio of 1.87:1, which is down from the previous week of 2.16:1 and the ratio of two weeks ago of 2.58:1.

British Pound: On June 1, the June and September British pound generated short-term sell signals, but remain on intermediate term buy signals.

For the week, the June British pound lost 14 pips. The COT report revealed that leverage funds liquidated 2,652 of their long positions and also liquidated 1,847 of their short positions. Remarkably, leverage funds remain long the British pound by a ratio of 2.27:1, which is an increase from the previous week of 2.21:1 and substantially above the ratio of two weeks ago of 1.78:1.

The lopsided long position of managed money will add selling pressure to the pound as these traders are forced to liquidate.

Euro: On June 4, the June and September euro generated short and intermediate term buy signals. These reversed the short and intermediate term sell signals of May 26 and May 27 respectively.

For the week, the June euro advanced 1.37 cents. The COT report revealed that leverage funds added 1,594 to their long positions and liquidated 15,138 contracts of their long positions. As of the latest report, leverage funds are short the euro by a ratio of 3.67:1, which is down from the previous week of 4.27:1 and substantially below the ratio of 4.89:1 made two weeks ago.

The current short ratio of 3.67:1 breaks below the previous low print of 3.89:1 recorded from the March 10, 2015 COT report. Finally, managed money is blowing out of short positions, but we think there is more to go before the euro tops.

Yen:

For the week, the June yen lost 100 pips. The COT report revealed that leverage funds liquidated 1,985 contracts of their long positions and added 10,794 to their short positions. As of the latest report, leverage funds are short the yen by a ratio of 4.57:1, which is up substantially from the previous week of 3.89:1 and more than double the ratio of two weeks ago of 2.15:1.

Dollar index: On June 4 the June and September dollar indices generated intermediate term sell signals, but remain on short term buy signals.

For the week, the June dollar index lost 62 points. The COT report revealed that leverage funds liquidated 1,281 contracts of their long positions and added 3,028 to their short positions. As of the latest report, leverage funds are short the dollar index by a ratio of 1.44:1, which is up from the previous week of 1.17:1 and is a complete reversal from two weeks ago when leverage funds were long the dollar index by a ratio of 1.44:1.

Year to date, the June dollar index is the out performer with a gain of 6.69%, June Swiss franc +5.47%, June British pound -1.90%, June yen -4.72%, June Australian dollar -6.23%, June Canadian dollar -6.32%, June euro -8.24%.

Thus far in the second-quarter, the June euro is the out performer with a gain of 3.41%, June Swiss franc +3.22%, June British pound +2.95%, June Canadian dollar +1.95%, June Australian dollar +0.46%, June dollar index -2.12%, June yen -4.47%.

S&P 500 (250 x):

For the week, the June S&P 500 futures contract lost 13.80 points. The COT report revealed that leverage funds liquidated 705 contracts of their long positions and added 669 to their short positions. As of the latest report, leverage funds are short the S&P 500 futures contract by a ratio of 1.31:1, which is  up from the previous week of 1.11:1 and a complete reversal from two weeks ago when leverage funds were long the S&P 500 futures contract by a ratio of 1.36:1.

Year to date, the NASDAQ 100 cash index is the out performer with a gain of 5.69%, S&P 400 cash index +5.11%, Russell 2000 cash index +4.67%, S&P 500 cash index +1.65%, New York Composite cash index +1.29%, Dow Jones Industrial Average cash index +0.15%.

Thus far in the second quarter, the NASDAQ 100 cash index is the out performer with a gain the 3.31%, S&P 500 cash index +1.21%,New York Composite cash index +0.74%, Russell 2000 cash index +0.66%, Dow Jones Industrial Average +0.41%, S&P 400 cash index +0.17%.

The month of June is generally regarded as one of the weakest months of the year for stock market performance.We decided to see if this holds up and examined performance of the S&P 500 cash index from 2005 through 2014. The best performance during the 10 year period occurred during June 2012 when the S&P 500 cash index advanced 3.96%. The worst performing June was 2008 when the index lost 8.60%. During 10 years, the S&P 500 advanced on four occasions and was a loser on six. The average loss during 10 years is -1.321%. The average loss during the six losing years was 3.185%.

The average gain during the four positive years was 1.475%. We are providing the 10 year stats for your own assessment: 2014+1.91%, 2013 -1.50%, 2012+3.96%, 2011 -1.83%, 2010 -5.39%, 2009+0.02%, 2008 -8.60%, 2007 -1.78%, 2006 +0.01%, 2005 -0.01%.

Although the S&P 500, Dow Jones Industrial Average and the New York Composite cash indices are on short-term sell signals, the internals for the broad market as a whole also are weakening. New highs minus New lows have been declining and the 30 day moving average of this metric is 59.93, 60 day 109.18 and the 90 day moving averages 123.70. In short, the number of stocks making new highs- minus stocks making new lows are declining. Additionally, the percentage of stocks on the New York Stock Exchange trading above their 50 day moving average is 37.8%, which is at mid-January 2015 lows.

What is most worrisome to us is the performance of the Dow Jones Transportation Index, which is down 8.60% from its November 28, 2014 high and approximately 2 weeks ago, the 50 day moving average crossed below the 200 day moving average. Though many market observers have excuses why this massive divergence is occurring, to us it is a sign of trouble. Another major problem for the transports: petroleum prices were declining during the time the transportation index also was declining. Since petroleum is a major cost component for transportation companies, we conclude there is something else going on. Whatever ails the economy, it is not favorable for stocks.

On Friday, the Dow Jones Industrial Average cash index closed below the 100 day moving average of 17,924.88 as did the New York Composite cash index. The S&P 500 cash index closed below the 50 day moving average for the second day in a row and the 30 day moving average of the index is below the 50 day moving average. The poor performance of the major indices on June 5 after the positive jobs report underscores the market is concerned more about rising interest rates rather than an improving economy. Side note: OIA was the only research company to our knowledge that published a short term sell signal on the 10 year treasury note on April 29.

We think advances in the indices will be tepid at this juncture. One strategy is to write out of the money calls in the June contract on any rally, which has 12 days left before it expires. Time decay on the option premium really begins to work in the favor of call writers when there are few days left before the contract ceases trading. A move to 2108.78 in the June E mini is likely, and we don’t expect a rally beyond 2117.55.

For those of you who follow the S&P 500 cash index, which is on a short term sell signal, a move to the 2111.40 level is likely and we do not see the rally extending beyond 2119.10. After the advance, which should not last much more than two or three days, we recommend the initiation of put positions in the September contract Emini contract.

10 Year Treasury Note: On June 1, the September 10 year treasury note generated an intermediate term sell signal after generating a short term sell signal on April 29.

For the week, the September 10 year treasury note lost 2-186 points. The COT report revealed that leverage funds liquidated 45,156 contracts of their long positions and also liquidated 46,957 of their short positions. As of the latest report, leverage funds are short the 10 year treasury note by a ratio of 1.76:1, which is above the previous week of 1.68:1 and the ratio of two weeks ago of 1.62:1.