Soybean oil: On September 13, October and December soybean oil generated short and intermediate term sell signals. We have no recommendation.
October live cattle lost 1.025 cents on volume of 66,694 contracts. Volume was the weakest since September 7 when the October contract gained 2.40 cents on volume of 58,225 contracts and total open interest increased by 3,146. On September 13, total open interest declined just 20 contracts, but the October contract lost 7,070 of open interest, which means there was almost enough open interest increases in the forward months to offset the decline in October, but not quite. Yesterday’s action was bearish because it indicated there were large numbers of new short-sellers in the forward months driving down prices.
As this report is being compiled on September 14, the October contract is trading 45 points above yesterday’s close and has made a daily low of 103.650, which is the lowest print since 101.100 made on September 9. The October contract will generate a short term buy signal if the daily low is above OIA’s key pivot point for September 14 of 107.890. Stand aside.
WTI crude oil:
October WTI crude oil lost $1.39 on strong volume of 1,296,220 contracts. Volume declined from September 12 when the October contract gained 41 cents on volume of 1,325,949 contracts and total open interest declined by 6,027. On September 13 total open interest declined by 8,737, which relative to volume is approximately 65% below average. The October contract accounted for a loss of 45,061 contracts.
As this report is being compiled after the release of the EIA report, the October contract is trading sharply lower, down 97 cents or -2.16% and has made a new low for the move up 43.74, which is the lowest print since 43.84 made on September 6. On September 1, the October contract generated an intermediate term sell signal and a short term sell signal on September 2. Stand aside.
The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 0.6 million barrels from the previous week. At 510.8 million barrels, U.S. crude oil inventories are at historically high levels for this time of year. Total motor gasoline inventories increased by 0.6 million barrels last week, and are well above the upper limit of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories increased by 4.6 million barrels last week and are above the upper limit of the average range for this time of year. Propane/propylene inventories rose 2.0 million barrels last week and are above the upper limit of the average range. Total commercial petroleum inventories increased by 6.0 million barrels last week.
December gold lost $1.90 on volume of 199,038 contracts. Total open interest declined by 1,717 contracts, which relative to volume is approximately 55% below average. For the past four sessions beginning on September 8, total open interest has declined every day bringing the cumulative decline to 23,464 contracts. This is a healthy development because of the lopsided long position of managed money, which entered the gold market at the wrong time. Many of these speculators are leaving the party as prices trade at the low end of the three month trading range.
According to the COT report released last Friday and tabulated on September 6, managed money is long gold by ratio of 13.17:1, which was up dramatically from the previous week of 7.66:1. As this report is being compiled on September 14, the December contract is trading $2.20 higher on the day after making a daily low of 1316.60 in the early evening session yesterday, which is the lowest print since 1307.40 made on September 2. The December contract will NOT generate a short term sell signal on September 14 because it traded above our pivot point. Continue to stand aside.
Australian dollar: On September 13, the September and December Australian dollar generated short and intermediate term sell signals.
This market is vulnerable to further downside action due to the lofty long position of managed money, and the long ratio currently stands at 2.56:1, which is up from the previous week of 2.37:1 and the ratio two weeks ago 2.15:1. We have no recommendation.