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May corn closed 16 1/4 cents lower on volume of 402,758 contracts. Open interest increased on the decline by 9,318 contracts. The May-July bull spread continued to work with May selling at a 1/4 cent premium to July. Volume was the highest since February 28, 2012 when volume reached 420,267 contracts and corn closed 8 3/4 cents higher. On March 29, corn generated a sell signal, but as I indicated in previous posts, speculators should be standing aside pending the March 30 report by the USDA. As I am writing this on March 30, corn is up the 40 cent limit. For the market to move to a buy signal, the daily low has to be above
$6.47 1/2. I want to see more market activity before suggesting a course of action.
May soybeans closed 12 cents lower on heavy volume of 243,773 contracts. Open interest increased on the decline by 1,247 contracts. As I write this on March 30, soybeans are up 54 cents and and made a new high for the move at $14.16. It will be interesting to see what happened to open interest when I get the final numbers Monday morning.
May New York Sugar closed 34 points higher on volume of 83,095 contracts. Open interest declined significantly on the move by 6,851 contracts. This was a major decline in open interest on the move higher, which is bearish. The market has seen five consecutive days of declining open interest totaling 16,823 contracts. Stand aside.
May New York crude oil closed $2.63 lower on light volume of 578,776 contracts. Open interest increased on the decline by 1,200 contracts. The market broke through the support level of $104.50 per barrel, which had been the support for the market going back to February 21. On March 29, the market generated a short-term sell signal. However, due to geopolitical tensions and the possibility of conflict with Iran, I suggest speculators stand aside. The market has declined for the past two days for a total of $4.55, but the decline has been on light volume. In other words, speculators are not panicking out of the market.
June New York gold closed $5.60 lower on volume of 224,748 contracts. Open interest declined by 1,005 contracts. Although the market is on a sell signal, speculators should be looking to acquire gold at lower prices.
May silver closed 16 cents higher on volume of 40,364 contracts. Open interest action continues to be dismal and declined by 3,806 contracts. The market is not on a buy nor a sell signal. Stand aside.
The June Euro closed 36 points lower on volume of 226,412 contracts. Open interest declined by 1,884 contracts. The market is getting support at current levels. Stand aside.
The June Australian dollar closed 18 points lower on volume of 130,607 contracts. Open interest declined by 815 contracts. The market made a new low for the move at 1.0214, which is the lowest price since January 18, 2012. On March 28, the Australian dollar gave a short-term sell signal. Before suggesting short positions I want to see the market action when the Australian dollar rallies. The next pivot point on the downside is 1.0158. If the market’s daily high is below that pivot point, a longer-term sell signal will be generated. Stand aside.
S&P 500 E mini:
The June S&P 500 E mini closed 2.00 points lower on heavier than usual volume of 1,828,788 contracts. Open interest increased by 3,402 contracts. This was the third day in a row that open interest increased when the market closed lower. The cumulative three day open interest increase has been 33,974 contracts while the market closed 16.75 points lower. This is bearish price and open interest action. Volume surpassed that of March 28 by 64,299 contracts, which was the highest volume since March 15 when 2,308,797 contracts changed hands.
June treasury notes closed 10 1/2 points higher on volume of 1,055,725 contracts. Open interest declined for the fourth day in a row by 14,759 contracts. From the time June notes made their bottom at 127-23 on March 20 to March 29, when June notes reached their high of 129-31, open interest has declined on the rally by a total of 54,738 contracts. Despite the rally, notes continue to act in an extremely bearish fashion. Previously, I suggested that speculators use either money stops or a hard stop at 130-01. As I write this on March 30, notes have reached 130-02. If speculators are stopped out, they should be looking to re-enter bearish positions. The extent of the rally in notes is going to depend upon whether the equities market continues to decline. If the stock market rallies, I expect notes to accelerate on the downside.