As was discussed here last night, tighter range and diminished volume was expected and received today as a meager 8,694 estimated contracts changed hands. In terms of the open interest that has risen to new record amount for the past 5 days at 122,022 lots, today’s lackluster performance is simply indicative of a range bound mkt with few willing participants. With London and the BMF both higher this morning, NY was expected to come in 50 points higher but disappointed some at 136.50 and roughly unchanged. The one single interesting factor today was that managed money did if fact participate in reasonable size on both the buy and sell side. The sellers of course were profit takers whom we have seen during the past several sessions. Conversely, managed money traders were equally on the buy side as evidenced by the nominal trading range for much of the day. It wasn’t until the latter part of the session and after the selling had dissipated that, a short lived rally to 136.80 mostly on local short cover along with minor amounts of trade and industry buying. By the time the 2 minute closing period had emerged, additional sellers mostly from origin and day trader sectors sold the mkt down to 135.75 finally ending the day’s session at 136.10 down 25 points.

Technically, in lieu of the continuing consolidation and diminished volume’s, a technical pull back is certainly in order as momentum indicators continue to show over bought conditions. I realize the redundancy of this statement which very well may be a reason that a further corrective move has yet to materialize. However, given the mkt’s inability to test the 139.50 contract high and the amount of managed money traders to at the very least take some profits, it is more than reasonable that a test of the 134.50, 133.80 and 133.05 support levels is in order.

Major support at 130.50 and 129.00 is also a consideration with momentum sellers expected below the latter level. Fundamentally, origin and industry continue to participate in the mkt as sellers and buyers albeit in marginal volumes indicative of the indecisiveness of the mkt place. Greater participation by both has been seen in greater numbers at the upper and lower ends of the prevailing range from 130.50 to 139.50. Outlook: consolidation with bearish undertones for nearby. A close above 139.50 remains the imperative for additional momentum buyers. London due: $ 10 Lower

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