May Chicago corn closed 5 1/2 cents per bushel lower on light volume of 242,211 contracts. Open interest declined by 7,451 contracts. The May-July spread continues to work with May selling at a 3/4 cents premium over July. The spread has narrowed on the corn price decline, which began on March 19. On that date, the premium for May was 2 3/4 cents. Corn has gone through a three-day decline of of 31 cents and open interest has declined by a total of 25,482 contracts. As long as open interest continues to decline when price declines, and May corn can continue to sell at a premium to July, a potential bullish set up is in the offing. Also, volume during the three-day decline has been very light with three-day average volume totaling 257,139 contracts, which is bullish. The key pivot point on the downside is $6.33 3/8 per bushel. It is okay if the market penetrates this pivot point, but the high of the day cannot be above the pivot point, or sell signal will be generated. Corn is still on a buy signal.
As I write this on March 22, the high for May Chicago wheat is $6.42 1/2. If the market does not trade above $6.43 5/8, on March 22, a sell signal will be generated.
May Chicago soybeans closed $.10 higher per bushel on light volume of 171,133 contracts. Open interest increased by 7,114 contracts. Stand aside.
May New York sugar closed 28 points lower on light volume of 102,864 contracts. Open interest increased by 8,228. On March 21, the spread between May and the back months widened on the decline. This is bullish. Sugar declined to 25.30 cents per pound, which was 90 points from a high of 26.20 made on March 20. This should have enabled speculators to acquire long positions on the pullback as I had previously recommended. Sugar went on a buy signal on March 15. The market needs to close over 25.81 cents per pound for the rally to continue. If long, stop protection should be at 25.21 cents per pound, which was the low made on March 19.
May New York crude oil closed $1.20 higher on extremely light volume of 477,046 contracts. Open interest increased by a very modest 2,758 contracts. I went to my records starting with February, and couldn’t find a day in which volume was lower than it was on March 21. Low volume on in advance when the market is trading at the high end of its range indicates a lack of enthusiasm on the part of speculators. On March 16, volume was 556,689 contracts when the market advanced $1.95 and on March 19 volume was 576,077 contracts when the market advanced $1.50. In other words, lower volume on advances has become an identifiable pattern. I have been saying for many days that the market looks tired and the volume is confirming it.
May gasoline declined 6/10 of a cent lower on volume of the 135,340 contracts. Open interest increased by 1,749 contracts. Stand aside.
April gold closed $3.30 higher on volume of 167,995 contracts. Open interest increased by 4,186 contracts. April gold went on a sell signal on March 15. As I have suggested before, speculators should be looking to position themselves on the long side of gold at lower prices. Although gold is on a sell signal, I recommend against shorting the market.
May silver closed $.39 higher on light volume of 41,407 contracts. Open interest declined by 474 contracts. Stand aside.
The June Euro closed 26 points lower on volume of 246,022 contracts. Open interest increased by 862 contracts. The high for the day was 1.3292, which is below our exit point of bearish positions at 1.3299. Stay with bearish positions.
S&P 500 E mini:
June S&P 500 E mini closed 2.00 points lower on volume of 1,535,715 contracts. Open interest increased by 5,826 contracts. Put protection should be in place.
The June 10 year treasury note rallied 20.5 points on volume of 1,186,630 contracts. Open interest declined on the rally by 8,104 contracts. The market reached a high of 128-20. The market continues to look weak, and as I have suggested before, bearish positions should be implemented in the 128-28 to 129-15 area.
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