March corn closed 9 3/4 cents lower on volume of 252,555 contracts. Open interest increased by 587 contracts. The high for January 30 was 6.42 3/4. This is the third day in a row where the market got up into the 6.40 area and couldn’t hold the gains. For the move to continue to the upside, the daily low has to be at least 6.37 Stand aside.
March soybeans closed 33 3/4 cents lower on fairly heavy volume of 179,692. Open interest increased by 15,120 contract. Short sellers are clearly in control and the magnitude of the open interest increase indicates that there is more selling to come. Please review the post of January 27 for key downside pivot points.
March sugar closed lower by 36 points on volume of 89,699 contracts. Open increased 4000 contracts. This is the second day in a row that open interest has increased on the down move in sugar. Please review the post of January 27 for key pivot points. If not long at this juncture, stand aside and wait for a better entry level. If long, stop placement and selling positions should be based upon risk tolerance and sound money management principles. The stop that I have advocated has been at the 22.82 level basis March sugar. Based upon the increase in open interest on the down move, it is certainly possible that the stop will be triggered.
March crude oil closed $.78 lower on volume of 426,467 contracts. Open interest increased by 2564 contracts. The market is consolidating and the key pivot points to watch for on the downside is 96.93, 95.75, and 94.36. The most recent low occurred on January 23 at 97.40. This was the lowest price since December 21. Stand aside.
March gasoline close 5.07 cents lower on volume of 138,979. Open interest declined by 1636 contracts. This is exactly the kind of open interest action that we should expect in a healthy bull market. Also, the volume declined on the pullback despite the range of 7.4 cents, which was greater than the 21 day average true range of 6.47 cents. Stand aside and wait for a larger pullback.
For quite a while I’ve been saying that the market was massively overbought and was due for a pullback. We got the first one on January 30, and March copper closed 6.25 cents lower on volume of 53,724. Prior to today, my view was to take partial profits at the higher end of the recent trading range with stops on the remaining position based upon risk tolerance and sound money management principles. If not long, stand aside.
April gold closed higher by $2.20 on volume of 193,654 contracts. Open interest declined 3870 contracts. The volume was almost half of the previous days volume of 344,707 contracts and was the lowest since January 24. Stand aside.
March silver closed $.27 lower on volume of 34,127 contracts. Open interest increased by 727 contracts. Stand aside.
The March euro closed 83 points lower on volume of 218,914 contracts. Open interest increased by 1361 contracts. This is consistent with a market that is clearly in a bearish trend. Key pivot points to watch for on the upside are: 1.328, 1.334, and 1.343. Stand aside.
S&P 500 E mini:
The March S&P 500 E mini closed 3.50 points lower on volume of 1,717,874. Open interest increased by 12,568 contracts. There is an interesting phenomenon occurring in the S&P 500 cash indices. For example, the S&P 500 was somewhat lower, but the number of issues declining versus advancing was lopsidedly negative. There were 136 issues advancing and 358 issues declining. Also of interest, was the terrible NASDAQ 100 breadth, which had 36 issues advancing and 63 issues declining even though the NASDAQ 100 closed up 5.75 points. The Dow 30 had 12 issues advancing and 15 declining, Russell 2000 had 472 issues advancing and 1403 issues declining, and the NYSE had 1115 issues advancing and 1902 declining. My real concern, is of the very poor performance of advances versus declines over the past week for the S&P 500. This is indicative of internal weakness in the blue-chip index.
10 year Treasury Notes:
March 10 year notes closed 10 points higher on volume of 910,055 contracts. Open interest declined by 4056 contracts. The market broke out into new high territory at 132-07. As I pointed out before, my view has been to take partial profits on longs with appropriate sell stop protection based upon risk tolerance and sound money management principles. Do NOT attempt to short this market.