Trading range 11540-10970 (5.70 cents)
Open interest : +268 (239,544)
Settlement : 11330 (-1.60)
Well the week/month ended with an onslaught to the downside. KCH19 ended lower by nearly 4.25% in its worst showing in quite some time. We have seen some weakness across the pond following news of the Dreyfus warehouse violations. The question remains, is this all connected? KC spreads were again under pressure in what was nothing short of an ugly day in the market. Volume was good, the best since Nov. 14 and far more than what we had seen all week. The question now becomes, is this the start of something deeper, or will the market try and hold. The pressure did not relent, and the market made a fresh low of 10725 post settlement (10755). ARB today closed 34.78, and down nearly 4 cents on the week, most of which came today.
As for the COT report. A relatively quiet period, as we had the Thanksgiving holiday covered here. A modest range of 5.70 cents, which was only a few ticks more than what we had in the market today alone. OI hardly changed.
Not much to see in terms of the report. NET fund longs last week, 34.81% of max. This week, 34.36%. Gross short last week, 42.73% of max. This week, 42.25%. We see some futures action where managed money was selling new, while large traders covered, almost an even offset.
So what next?? Hard not to be concerned if you are a BULL following todays action. Again, I will be curious to see Mondays OI report to try and get a handle on who was participating in today's move. The selling was prolonged and almost relentless at times, having the feeling of some big fund sellers, but we will see how Monday's OI looks.
At the same time the US $ was very strong and the $/REAL 3.8641. Speaking of the BRL, it has weakened to a post-election low amidst collapsing Brazilian commodity prices. The G20 is underway and all eyes remain on some clarifications in terms of US- China trade. Whether anything real comes out of this meeting we will have to see. For now, US equities are still enjoying the impact of the Powell comments ("close to neutral", and currently as I write, are at the days highs. Will Santa Claus come to the rescue of KC ?? Right now, after quiet, listless action, it appears the bulls will need some help to recover some mojo.
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