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Mills take advantage of slide in cotton prices
02 Jun '08
3 min read
Over the weekend, the Wall Street Journal broke the story that the cotton was also under investigation by the CFTC. As one long time commodity broker was quoted as saying "they smell a skunk, they just cant find it yet".
While we are still under the bearish influence of the outside range session on Thursday, May 22nd, the consolidation pattern Thursday and Friday validates the importance of last Wednesdays range.
That means for July, a close above 6720 should trigger a quick test of 6843. A close above 6921 would be initial bottoming action. For Dec, a close above 7550 should trigger a quick test of 7715. A close above 7800 would be initial bottoming action.
The downside risk is not so clear. Finding a downside target should July close below 6511 is difficult. One has to go back to the first month of the crop year to find closes this low. There are previous lows as lows in the 58-57 cent area. For December a close below 7379 opens the door technically for a dip into the 7200-7050 area to be tested.
Bottom line is that bulls need to continue to dig in right here.
While we are still under the bearish influence of the outside range session on Thursday, May 22nd, the consolidation pattern Thursday and Friday validates the importance of last Wednesdays range.
That means for July, a close above 6720 should trigger a quick test of 6843. A close above 6921 would be initial bottoming action. For Dec, a close above 7550 should trigger a quick test of 7715. A close above 7800 would be initial bottoming action.
The downside risk is not so clear. Finding a downside target should July close below 6511 is difficult. One has to go back to the first month of the crop year to find closes this low. There are previous lows as lows in the 58-57 cent area. For December a close below 7379 opens the door technically for a dip into the 7200-7050 area to be tested.
Bottom line is that bulls need to continue to dig in right here.
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