Corn closed unchanged on volume of 258, 549. Open interest was lower by 1,072 contracts. USDA crop report due out on Thursday, January 12. Stand aside until report is released.
Soybeans closed one cent lower on volume of 147, 287 contracts. Open interest increased by 1,131 contracts. Stand aside until crop report is released on January 12.
March crude oil closed up $.93 on volume of 600, 036 contracts. Open interest declined by 4,929 contracts. This market continues to consolidate in the range between $100.00 and $103 50. Market should correct down to its 50 day moving average, which is 98.32. Once the market moves to its 50 day moving average, I will re-examine it to see how it trades in order to determine whether longs should be instituted. Stand aside for now.
Gold closed up 27.40 on volume of 186, 529 contracts open interest increased by 3879 contracts. This rally could carry up to its 50 day moving average of 1685. The rally from the lows of 1523 looks unconvincing. In order to determine whether gold should be purchased, it will be important to see how it performs on a day when the equity market is sharply lower. At that point, it will become apparent how much correlation exists between equities and precious metals. Stand aside for now.
March silver had a range of a $1.52 and reached a high of $30.31, which was the highest price since December 13, 2011 when silver made a high of $32.03. The market closed $1.03 higher on the day on volume of 40,990 contracts. Open interest declined 400 contracts. This was a bearish development and indicates that silver is still looking for a bottom. Stand aside.
The euro closed up 34 points on volume of 215, 751 contracts. Open interest increased by 3827 contracts. Although this market can certainly plunge to new lows, there is a significant risk of being short down at these levels. Stand aside.
S&P 500 E mini:
The index closed higher by 10.50 points and the range for the day was 17.50 points on volume of 1, 532, 277 contracts. On this day, the market broke through the old high of 1283 on October 27, 2011. The market closed at a new high for the move at 1286. The startling aspect of January 10 market action was that the volume was very light and open interest actually declined on the move by 459 contracts. This is a very bearish development. The open interest action from the beginning of the rally on December 20 has been lackluster. The action of January 10, merely confirms what previous open interest numbers have been telling us. Certainly the market can continue to move higher, but it is becoming increasingly dangerous to trade the indices from the long side. Protective put positions are advised.
10 Year Treasury Notes:
Treasury notes declined by 4 1/2 points on volume of 742, 998 contracts. The bulls are still in control as open interest increased by 24, 232 contracts. The steady upward move in treasury note prices when equity prices are rising is another worrisome sign that equity indices are in the process of topping out.