Futures prices were called to open around 30-40 higher this morning before popping to 10 higher in the December. There was scattered trade buying out of the trade, but continued spec selling based on yesterday's weakness.
Prices quickly jumped back up through 52 cents. Local short covering aided the early strength, as did the prevailing rumor of the Chinese government releasing over 600,000 MT of import quotas.
We have heard this rumor a few too many times, though would expect it to take place fairly soon, with a built in clause to also purchase Xinjiang domestic stocks.
Prices never really took off in either direction for the rest of the session, testing the opening levels but not posting in the negative at all.
Towards the end of the session prices began to move up again, bolstered by some bullish trade options ( call spread buying mostly ) allowing prices to settle with active month gains of 62-74 points. Estimated volume was well down on yesterday's, at 13,000 lots.
This morning's delayed spec hedge displayed little week on week change with the spec net position now at 4.3 percent instead of 3.3 percent short last week.
Over last week we saw 3400 new longs and 5,500 new shorts. Open interest was today at an all time record 181,391 lots.
Technically the December daily is still in a broader down trend as displayed beneath, and yesterday's pattern of island top reversal has left an even more negative outlookon the chart. Today's price action took place within yesterdays – a sign of indecision.
We may yet see some more consolidation this week. Momentum indicators are again moving lower, though it must be noted that these indicators (such as the RSI) are not making new lows.
The developed trend channel is in tact, though should limit losses to the downside around the 51.15 old contract lows.
marketing@alchempro.com
