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of a futures market, which influences the ability to buy or sell at

or near a given price.

Open interest can be a little confusing. If a

new buyer (a long) and new seller (a short) enter a trade, their

orders are matched and open interest increases by one. However, if a

trader who has a long position sells to a new trader who wants to

initiate a long position, open interest does not change as the

number of open contracts remains the same. If a trader holding a

long position sells to a trader wanting to get rid of his existing

short position, open interest decreases by one as there is one less

open contract.

Volume and open interest are "secondary"

technical indicators that help confirm other technical signals on

the charts. If an upside price breakout is accompanied by heavy

volume, that is a strong signal that the market may want to continue

to move higher because it indicates more traders jumped on the

rising prices. On the other hand, a big upside move or a move to a

new high that is accompanied by light volume makes the move suspect

and indicates a top or bottom may be near or in place. Also, if

volume increases on price moves against the existing trend, then