For Bloomberg access:{OIAR<GO>}

Corn:

March corn advanced 5.50 cents on volume of 227,618 contracts. Volume declined from December 9 when the March contract gained 0.25 cents on volume of 260,546 contracts and total open interest increased by 3,495. On December 10, total open interest declined by 3,625 contracts, which relative to volume is approximately 40% below average. The December contract lost 1,970 of open interest, July 2016 -6,140, and there were insufficient open interest increases to offset the decline in the two delivery months. This confirms the bearish set up for corn.

As this report is being compiled on December 11, the March contract is trading 3.00 cents lower and has made a daily low of 3.74 3/4. The March contract has struggled at the upper end of the trading range (3.79-3.82) and has been unable to make a daily low above the pivot point, which for December 11 is 3.79. The downtrend will resume if March corn makes a daily high below OIA’s pivot point of 3.73 ¬†1/4. March corn remains on short and intermediate term sell signals. We have no recommendation.

Soybeans:

January soybeans advanced 1.50 cents on light volume of 211,399 contracts. Volume was the weakest since December 3 when the January contract gained 5.25 cents on volume of 209,554 contracts and total open interest increased by 5,963. On December 10, total open interest declined by 6,657 contracts, which relative to volume is approximately 10% above average meaning liquidation was above normal on the modest advance.

As this report is being compiled on December 11, the January contract is trading 6.50 cents lower and has made a daily low of 8.70 1/4, which is the lowest print since 8.69 3/4 made on December 9. It looks increasingly likely that January soybeans will generate a short-term sell signal, and this will occur if the January contract makes a daily high below OIA’s key pivot point of 8.69 3/4. The rally will resume (which OIA thinks is unlikely) if the daily low is above OIA’s pivot point for December 11 of 8.82 1/4. January soybeans remain on a short-term buy signal, and an intermediate term sell signal. We have no recommendation.

Coffee:

March coffee lost 45 points on volume of 13,759 contracts. Total open interest declined just 28 contracts. The December 2015- July 2016 contracts lost a total of 213 of open interest. As this report is being compiled on December 11, the March contract is trading 4.65 cents lower and is made a daily low of 1.2085.

On December 9, the March contract generated a short-term buy signal and this is the first day of a pullback since the generation of the signal. Aside from the fact that global markets are weakening, the Brazilian real is weakening considerably against the US dollar in trading on December 11 and this is negatively impacting coffee.

Coffee has a pattern of generating buy signals, which are then shortly reversed. For the March contract to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for December 11 of 1.2030. We have no recommendation.

WTI crude oil:

January WTI crude oil lost 40 cents on volume of 1,091,822 contracts. Total open interest increased by 1,786 contracts, which is minuscule and substantially below average. However, the January contract lost 67,127 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in January and increase total open interest fractionally, which is bearish.

As this report is being compiled on December 11, the January contract is trading sharply lower, down $1.12 or -3.07% and has made a new contract low of 35.35. Additionally, it appears that heating oil also is making new contract lows on December 11. As we mentioned yesterday, there are rumors of a major hedge fund in serious trouble and if true, liquidation could continue until this particular fund is blown out. WTI remains on short and intermediate term sell signals. Do not try to pick a bottom.

Dollar index:

The December dollar index advanced 62.6 points on heavy volume of 86,831 contracts. Total open interest declined by 1,424 contracts, which relative to volume is approximately 35% below average. The December contract lost 21,745 contracts as it approaches first notice day on Monday.

As this report is being compiled on December 11, the March contract is trading sharply lower, down 47.9 points and has made a daily high of 98.155, which is above OIA’s key pivot point for the generation of a sell signal. For a sell signal to occur, the daily high must be below the key pivot point for December 11 of 98.013. We have no recommendation.

Euro:

The December euro lost 90 pips on heavy volume of 631,420 contracts. Volume declined from December 9 when the December contract gained 1.38 cents on volume of 678,494 contracts and total open interest increased by 58,456. On December 10, total open interest declined by a massive 47,998 contracts, which relative to volume is approximately 210% above average, meaning that liquidation was extremely heavy on the decline. The December contract lost 135,542 as it approaches expiration next week. For the past three sessions beginning on December 8, price and total open interest action has been acting in a consistent bullish fashion.

As this report is being compiled on December 11, the March contract is trading 65 pips higher and has made a daily high of 1.1060, which is slightly below the high for the move of 1.1070 made on December 9. Today the COT report will be released, and it will be interesting to see whether there is any change in the massive short position of leveraged funds. The report tabulation date is December 8, and this will include a good portion of the euro rally.

We need to see a large contingent of short-sellers get blown out before the euro is a candidate for potential bearish positions. For the March contract to generate a short-term buy signal, the low of the day must be above OIA’s key pivot point for December 11 of 1.0971 and the low thus far has been 1.0954. The March euro remains on short and intermediate term sell signals.

Swiss franc: On December 11, the March Swiss franc will generate a short-term buy signal, but remains on an intermediate term sell signal.

The December Swiss franc lost 58 pips on very heavy volume of 62,152 contracts. Volume declined from December 9 when the December contract gained 97 pips on volume of 66,174 contracts and total open interest increased by 6,070. On December 10, total open interest increased by a massive 11,597 contracts, which relative to volume is approximately 475% above average meaning aggressive new short-sellers were entering the market in large numbers and driving prices lower (1.0096).

As this report is being compiled on December 11, the March franc is trading 55 pips higher and has made a daily low of 1.0 142, which is above OIA’s key pivot point for December 11 for the generation of a short-term buy signal of 1.0103. We have no recommendation.

S&P 500 E-mini: The December and March S&P 500 E-mini contracts will generate short-term sell signals on December 11, but remain on intermediate term buy signals.

The December S&P 500 E-mini gained 7.25 points on heavy volume of 2,598,200 contracts. Volume declined from December 9 when the December contract lost 16.75 points on volume of 3,072,892 contracts and total open interest increased by 9,908. On December 10, total open interest increased by 12,281 contracts, which relative to volume is approximately 75% below average. The December contract lost a whopping 291,662 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in December and increase total open interest slightly.

The price and open interest action seen on December 10 is the most positive since December 1 when the December contract gained 20.25 points and total open interest increased by 10,125.

As this report is being compiled on December 11, the December S&P 500 E-mini is trading sharply lower, down 30.75 points, or -1.49% and has made a daily low of 2012.25, which is the lowest print since 1998.50 made on November 16. In the report of November 30, OIA recommended the initiation of short call positions in the December 2015 S&P 500 E-mini contract and this trade has worked well. Continue to hold it until expiration on December 18.