Saturday, October 25, 2014

Has Cotton Created A Head & Shoulders Bottom?

Cotton Futures--- Cotton futures in the December contract are trading above their 20 but still below their 100 day moving average trading in a 3 month channel settling last Friday in New York at 63.00 currently trading at 64.80 up about 80 points for the trading week with a possible head and shoulders bottom starting to be created on the daily chart. There is major support in the December cotton at 61 and major resistance at 66 with large world supplies keeping a lid on prices also due to the fact of a strong U.S dollar as harvest activity will start to improve over the next several days in the southern part of the United States bringing in a near record crop as I’m still sitting on the sidelines in this market because the trend currently is mixed.

Cotton prices have dropped over 2000 points from the summer highs and has now been consolidating for the last 3 months so continue to look for a breakout above 66 on the upside & below 61 on the downside but at the current time look at another market with a stronger trend as choppy markets are difficult to trade in my opinion. TREND: MIXED –CHART STRUCTURE: EXCELLENT (more)

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