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July soybeans lost 26.75 cents on volume of 227,670 contracts. Total open interest increased by 3,922 contracts and open interest in the July contract declined by 6,519 contracts on volume of 96,805 contracts. I was disappointed that total open interest went up, on the decline, however, volume was light indicating that speculators were not panicking out of the market. Soybeans (unlike soybean meal) has never generated a short-term buy signal. Soybeans generated a short-term sell signal on May 23, but despite the rally, has not had the strength to turn into a buy signal. The July-December bull spread narrowed by 9.50 cents. The market remains on an intermediate term buy signal. Stand aside.
July soybean meal lost $11.00 on volume of 72,141 contracts. Open interest declined by 1,092 contracts and open interest in the July contract declined by 5,100. Although soybean meal generated a short-term sell signal on May 23, it was able to reverse that signal and generate a short-term buy signal on June 8. Readers should be consulting with their investment advisor or broker about the timing and an entry point for long positions.
July corn closed 8.50 cents higher on heavy volume of 467,168 contracts. Total open interest declined by 2,017 contracts and open interest in the July contract declined by 38,170 contracts on volume of 214,591. Despite the heavy volume on the move higher, there was not enough buying to overcome the massive open interest decline in the July contract. In relation to volume, the total open interest decline was modest. The market is experiencing some short term tightness in the cash market, which is reflected in the robust movement of the July-December bull spread. The spread widened by 20.50 cents. Corn remains on a short and intermediate term sell signal. Stand aside.
July wheat closed unchanged on volume of 139,559 contracts. Open interest increased by 5,950 contracts. The market is on an intermediate term sell signal. Stand aside.
July crude oil lost 70 cents on relatively heavy volume of 629,186 contracts. Open interest went up by a respectable 16,579 contracts. As I have pointed out on a couple of occasions, crude oil is trading in the low 80s which is a value zone based upon the 206 week moving average of $82.27. On the continuation chart, the 50 day moving average has crossed below the 200 day moving average and the market remains on a short and intermediate term sell signal. Stand aside.
July gasoline closed .52 cents higher on above average volume of 167,149 contracts. Open interest increased by 497 contracts. Gasoline is trading in its value zone based upon its 104 week moving average of $2.65. The market remains on a short and intermediate term sell signal. Stand aside.
July copper closed .40 cents higher on heavy volume of 92,136 contracts. Open interest increased by 4,540 contracts. June 13 marked the third day in a row when the low in copper reached the 3.30 area and open interest in this period increased by 11,007 contracts. In other words, with all the new shorts that have come into the market, they're not able to break copper below the $3.30 level. The 50, 150, and 200 day moving averages converge between $3.58-$3.63. Speculators should wait for a rally to at least this level before implementing bearish positions. The market is oversold and the fact that copper has not been able to break below $3.30 increases the possibility of a short-term bottom. Stand aside.
August gold closed $5.60 higher on fairly light volume of 235,366 contracts. Open interest increased by 5,126 contracts. The market continues to act well, but it appears that many speculators are not joining in on the rally. Since gold generated a short-term buy signal on June 6, the market pulled back to $1556.40 on June 8 and it has been moving irregularly higher ever since. In the June 7 post, which was written on June 8, I commented that the market was experiencing a classic shake out after generating the short-term buy signal. That call proved to be correct and I expect that gold will continue to move higher with some periodic sharp pullbacks. August gold closed at $1619.40, which is above the 50 day moving average of $1615.96. For more information about gold, please review the June 3 Weekend Wrap.
July silver closed unchanged on light volume of 42,214 contracts. Open interest declined by 232 contracts. Stand aside.
The June Euro closed 77 points higher on huge volume of 527,443 contracts. Volume was higher than the previous day, which was the highest in several months. The most remarkable aspect of yesterday's trading was the fact that open interest went up a whopping 33,427 contracts. In relation to volume, the open interest increase was massive, which indicates that both longs and shorts feel strongly about their positions and the direction of the Euro. I have never seen such a huge increase or decrease in open interest in recent memory. The market made a high of 1.2611 and as I write this on June 14, the high is 1.2619. Speculators are positioning themselves for the upcoming Greek elections, which promises to have a major impact on the Euro. However, there is no reason to be involved in the Euro at this juncture because whether you are long or short, you risk experiencing a high degree of financial pain if you are on the wrong side of the market. Do not enter long or short positions prior to the Greek elections.
S&P 500 E mini:
The September S&P 500 E mini lost 10.75 points on heavy volume of 3,078,533 contracts. Open interest decreased by a minuscule 61 contracts. The market has been a very choppy affair of late, and the crisis in Europe appears to be accelerating. Maintain long put protection.