January soybeans gained 11 cents on very light volume of 142,793 contracts. Volume was the lowest since November 8, when soybeans lost 11.25 cents on volume of 127,712 contracts and open interest declined by 1,364 contracts. On November 14, total open interest declined by 3,904 contracts, which in relation to volume is average. Open interest declined in the January 2012 through August 2013 contracts. The decline of open interest on the advance is a bearish indicator, and we continue to think the low of 13.91 1/4 made on November 13 will be tested and likely taken out. Due to the Veterans Day holiday, the export sales report will not be released until November 16. Stand aside.
December soybean meal gained 2.80 on volume of 68,646 contracts. Volume was the lowest since November 8 when 61,347 contracts were traded and open interest declined by 343 contracts while December meal declined by $6.60. The December contract lost 3,460 of open interest. We think the low of 427.00 made on November 13 will be tested and likely taken out. Stand aside.
December corn gained 2.25 cents on volume of 285,253 contracts. Volume was the lowest since November 6 when 215,216 contracts were traded and December corn advanced 5.25 cents while open interest declined 332 contracts. On November 14, open interest increased by 5,426 contracts, which in relation to volume is approximately 15% less than average. We think corn will take out the low of 7.10 1/2 made on November 13 and take out the low of 7.05 made on September 28. However, as corn prices continue to decline, exports will likely improve, and domestic consumption will likely increase. There is a liquidation mindset across all commodities and equities, and it may take a while before corn finds some stasis. However, once it does, a low risk trade will present itself. In the meantime, corn is on a short and intermediate term sell signal, which means that corn should be traded from the short side only. The problem with this is, a solid buy stop on a short position presents too much risk.
Wheat: On November 14, December wheat generated a short-term sell signal.
December wheat lost 2.25 cents on volume of 123,920 contracts. Volume was the lowest since November 6, when 91,566 contracts were traded and open interest increased by 1,838 contracts while December wheat advanced 11 cents. On November 14, open interest increased by 3,887 contracts, which in relation to volume is approximately 20% above average. On November 13, December wheat made a low of 8.43 1/4, which is slightly above 8.40 1/4, which was the low made on October 15. Although, wheat generated a short-term sell signal on November 14, it has not generated an intermediate term sell sell signal, but is close. Stand aside.
December crude oil advanced 94 cents on relatively heavy volume of 700,161 contracts. Volume declined approximately 129,000 contracts from November 13, when crude lost 19 cents and open interest declined by 55,900 contracts. On November 14, open interest declined by 4,701 contracts, which in relation to volume is approximately 65% less than average. During the past 4 trading sessions, open interest has declined by 67,668 contracts while December crude oil advanced $1.23. This is bearish. Stand aside.
December heating oil gained 2.74 cents on very light volume of 73,044 contracts. Open interest declined by 409 contracts, which in relation to volume is approximately 60% less than average. During the past 4 days, open interest has been acting erratically relative to price. Stand aside.
December natural gas advanced 2.1 cents on volume of 409,902 contracts. Interestingly, volume was 8,481 contracts higher than November 13, when natural gas closed 16.9 cents higher and open interest increased by only 600 contracts. On November 14, open interest increased by 10,127 contracts, which in relation to volume is average. The market made a high of $3.822, which is the highest price since October 29 when the high was 3.851. Though it made a new high for the move on November 14, nat gas closed at 3.760. It appears that latecomers got on board on November 14, which may make the market vulnerable to a short-term setback. As this report is being compiled on November 15, December natural gas made a fractional new high at 3.83. On October 19, December natural gas made its major high of 3.97. Stand aside.
December copper lost 1.75 cents on volume of 59,284 contracts. Open interest declined by 1,793 contracts, which in relation to volume is approximately 20% above average. Since November 8, copper has not traded above $3.50. The market look sluggish, and there is support around 3.35 going back to August. Stand aside.
December gold advanced $5.30 on light volume of 156,590 contracts. Open interest increased by 2,180 contracts, which in relation to volume is approximately 45% below average. As indicated in the November 11 Weekend Wrap, gold has been acting very weak on a seasonal basis, and there is no compelling reason to be involved at this juncture. Gold must close above 1735 and its 50 day moving average of 1743 before it begins to look appealing on the long side. Gold has been unable to close above its 50 day moving average since October 22, which confirms the lackluster quality the market. In the meantime, we expect gold to trade within a range of $1665 and 1735. Stand aside.
December silver advanced 39.3 cents on volume of 55,263 contracts. Open interest increased a mere 53 contracts. Our thinking on gold reflects our views on silver. Silver has not closed above its 50 day moving average since October 18. It appears that the market will trade between its recent low of $30.655 made on November 5 and $33.00. Stand aside.
The December euro advanced 41 points on volume of 270,142 contracts. Open interest increased by 3,945 contracts, which in relation to volume is approximately 35% less than average. The euro generated a short-term sell signal on November 5, but has not generated an intermediate term sell signal. Stand aside.
S&P 500 E mini:
The S&P 500 E mini lost 17.75 points on volume of 2,455,673 contracts. Open interest increased by 39,983 contracts, which in relation to volume is approximately 25% less than average. It was announced today (November 15) that Europe is in its second recession of the last 4 years. Additionally, the Shanghai Composite Index closed at 2030.29, which is not far from its four-year low of 1999.48. In short, the world’s economies are struggling against major headwinds, and this will continue to weigh on equities. The market has not been able amount a rally of any significance. This may be due to huge numbers of investors selling in advance of 2013, and with the market moving lower, the need to liquidate becomes more acute due to potential losses of profit and increasing losses. Continue to maintain long puts.