WTI crude oil:
December WTI crude oil lost 61 cents on strong volume of 1,341,181 contracts. Volume declined dramatically from November 9 when December contract gained 29 on record-setting volume of 1,861,909 contracts and total open interest increased by 24,326. On November 10, total open interest increased by a sizable 35,651 contracts, which relative to volume is average. The December contract lost 42,203 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 substantially.
Yesterday’s action confirms the downtrend in crude and this continues on November 11. Currently, the December contract is trading $1.20 lower and has made a daily low of 43.03, which takes out the November 9 print of 43.07, and is the lowest price since 43.06 made on September 20 and 43.00 made on September 1. On October 31, OIA announced that December WTI generated a short term sell signal and and intermediate term sell signal on November 2. Stand aside.
Gold: December 2016 and February 2017 New York gold will generate short term sell signals on November 11. This reverses the November 1 short term buy signals. Both contracts remain on intermediate term sell signals.
December gold lost $7.10 on strong volume of 482,069 contracts. Total open interest declined by 2,430 contracts, which relative to volume is approximately 75% below average. As this report is being compiled on November 11, the December contract is trading sharply lower, down $33.54 or-2.65% and has made a daily low of 1223.40, which is the lowest print since 1214.90 made on June 3. Stand aside.
Dollar index: The December 2016 and March 2017 dollar indices will generate a short term buy signals on November 11. Both contracts remain on intermediate term buy signals.
The December dollar index advanced 24.5 points on strong volume of 41,720 contracts. Volume declined from November 9 when the December contract gained 66.9 points on heavy volume of 91,771 contracts and total open interest declined by 1,800 contracts. On November 10, total open interest declined again, this time by 1,340 contracts, which relative to volume is approximately 15% above average.
The COT report released last Friday show that leverage funds were long the dollar index by ratio of 1.11:1, up from the previous week of 1.04:1 and a complete reversal from two weeks ago when leverage funds were short by ratio of 1.08:1.
The rising dollar index combined with rising interest rates will put a damper on the commodity complex and likely on the equity market eventually. As this report is being compiled on November 11, the December contract is trading 20 points higher and has made a new high for the move of 99.130, which takes out the previous print of 99.090 and is at the highest level since January 2016. Stand aside.
S&P 500 E-mini: On November 10, the December 2016 and March 2017 S&P 500 E-mini generated short term buy signals. Both contracts remain on intermediate term sell signals.
December S&P 500 E-mini gained 7.00 points on heavy volume of 3,143,295 contracts. Volume declined substantially from the previous day, November 9 when the December contract advanced 24.75 points on volume of 5,300,860 contract and total open interest increased by 41,111 contracts, which is substantially below average. On November 10, total open interest declined by 4,983 contracts, which relative to volume is dramatically below average, but a total open interest decline on yesterday’s advance is negative.
Yesterday the December contract made a high of 2180.00, which takes it close to the all-time high of 2191.50 made on August 23. Now that the E-mini is on a short term buy signal, the market should experience a pullback lasting 1-3 days and this is the opportunity to initiate bullish positions. Although we think the indices are going higher, the specter of rising interest rates and the dollar may eventually put a halt to the rally.