Cotton Futures—Cotton futures are trading lower for the 4th consecutive session down another 100 points at 75.78 as I am now recommending a bearish position while placing the stop loss above the high that was created on April 9th at 79.57 as the risk is around $1,900 per contract plus slippage and commission.
Cotton prices are now trading under their 20 and 100 day moving average as the trend has turned to the downside as prices topped out over the last several weeks as the agricultural market across the board remain weak especially the grain market.
Planting is in full swing in the southern part of the United States as ideal weather conditions persist as that is also putting pressure on prices coupled with the fact of weakening demand as we still do not have an agreement with China as they are the largest importer of U.S cotton in the world.
The chart structure will improve in next week’s trade therefor the monetary risk will be lowered as I still believe the risk/reward are in your favor so play this to the downside while making sure that your risk 2% of your account balance on any given trade.
TREND: LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE
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