July corn advanced 2.50 cents on volume of 526,461 contracts. Total open interest declined by 19,068 contracts, which relative to volume is approximately 30% above average, which indicates that liquidation was substantial on the modest advance. The July contract accounted for a loss of 31,352. In the early going, the July contract made a low of 3.70 and then rallied for the remainder of the session.
As this report is being compiled on June 16, the July contract is trading 3.00 cents above yesterday’s close and has made a high of 3.83 3/4, which is the highest print since 3.85 made on June 14. In yesterday’s note, we said that clients should be looking to get on board corn again if the July contract makes a daily low above 3.78 1/4 and thus far the low has been 3.77. Stand aside until July makes a low above the pivot point.
Gold: On June 15, August 2017 New York gold generated a short term sell signal and it remains on an intermediate term buy signal.
August gold lost $21.30 on surprisingly light volume of 264,904 contracts. Though volume was light, the total open interest decline was heavy losing 14,393 contracts, which relative to volume is approximately 120% above average. This indicates that liquidation was extremely heavy, though many participants were on the sidelines holding firm as evidenced by the relatively low volume. As this report is being compiled on June 16 the August contract is trading nearly unchanged on low volume.
As the June 6 note on gold confirms, our concern at that time when gold was trading near the highs was that the dollar index would generate a short term buy signal due primarily because the euro was overbought and a correction in the euro was likely. Yesterday’s action in gold confirmed that scenario and though the euro and the dollar index will not generate the signals we expected today, we think this is likely next week. Stand aside in gold. Longer-term we think gold is bull market
From the June 6 note on gold:
“As we pointed out in previous notes on gold, our concern is that a rally in the dollar is overdue and the euro is substantially overbought. A correction in both could cause gold to fall sharply, although we think this will be temporary.”
“As a consequence, gold could generate a short term sell signal until such time as the dollar rally exhausts itself. Another fly in the ointment is the specter of increasing interest rates, which is negative for gold and precious metals. Also, gold is trading at multi-months highs and this could increase hedging by producers. We recommend a stand aside posture for now.”
Euro: The September euro will not generate a short term on June 16. For this to occur, the high of the day must be below OIA’s key pivot point for June 16 of 1.1247.
The September euro lost of 65 pips on heavy volume of 377,171 contracts. Total open increased by a sizable 11,169 contracts, which relative to volume is approximately 10% above average. This means that new short-sellers were moving into the euro and driving it to a low of 1.1187, the lowest print since 1.1175 made on May 30.
As this report is compiled on June 16, the euro is trading 40 pips above yesterday’s close and has not taken out yesterday’s low. We look for more corrective action in the euro, but longer-term really like the long side of this currency.
Yen: The September yen will generate a short term sell signal on June 16 provided the daily high remains below OIA’s key pivot point for June 16 of .9083.
Yesterday, the September yen lost 109 pips on heavy volume of 299,470 contracts. Total open interest declined by 7,690, which relative to volume is average. As this report is being compiled on June 16 the September contract is trading nearly unchanged on the day on their low volume. Stand aside.
NASDAQ 100 (futures): The September NASDAQ 100 futures will generate a short term sell signal on June 16 provided the daily high remains below OIA’s key pivot point for June 16 of 5732.87.
From the June 12 research note on the Nasdaq 100:
“Nasdaq 100 (cash index): On June 12, the NASDAQ 100 cash index generated a short term sell signal and remains on an intermediate term buy signal.”
“This is the first time a short term sell signal has occurred in the NASDAQ 100 during calendar year 2017. During mid-May, the S&P 400, New York Composite, Russell 2000 and Dow Jones Industrial Average generated short term sell signals, but, the NASDAQ 100 and S&P 500 remained on buy signals.”
“For confirmation, we want to see the June/September NASDAQ 100 futures generate a short term sell signal. This will occur in the June contract if the daily high is below OIA’s key pivot point for June 13 of 5725.67. The reason futures has not generated a sell signal is because they trade almost 24 hours a day, which enables the index to expand its range in the overnight session.”