Cotton Futures—Cotton futures in the May contract settled last Friday in New York at 84.68 while currently ending the week on a positive note up 145 points breaking a 7 day losing streak currently at 79.89 down nearly 500 points for the week as prices hit a 3 month low.
I have been recommending a bullish position from the 79.00 level and if you took that trade continue to place the stop loss below the September 29th low of 66.28 as an exit strategy as this is a high risk trade as the volatility remains incredibly high as that situation is not going to change anytime soon especially as we enter the summer season.
Cotton prices are trading below their 20 and 100 day moving average as this recommendation was a counter-trend trade as I believe prices have become to cheap as we topped out on February 25th at 95.68 dropping about 1,800 points in a matter of weeks from today’s low as the commodity markets have run into trouble over the last several weeks due to the fact that U.S treasuries have hit a 1 year high in yields also pushing the U.S dollar higher which are 2 fundamental factors which are bearish.
At the present time I also have a bullish orange juice recommendation as I’m also keeping a close eye on coffee and sugar as I remain bullish across the board as I believe this is just a retracement in a giant secular bullish trend which should continue due to massive quantitative easing from the U.S government. Traders are keeping a close eye on next week’s crop report which will show the amount of acres that are planted in the United States as that certainly will dictate short-term price action.
CHART STRUCTURE: POOR
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