The last trading day of the month and the fireworks continued as we closed at new record highs in K'08 and set the highest monthly closing level in almost 10 years! Technically, this week alone has blasted through years of resistance levels and closed the week based K'08 over 600 pts higher.
If you just try to focus on a top for the front month you have to look near the mid 80's which would test the high set back in 2003 at 85.00 and also in 1998.
If this upside resistance line is broken, then we are certainly going to have to look at the 1995 high of 117 as this bull commodity train keeps rolling with little signs if coming to a stop. Volume was strong again today with over 50,000 futures and 57,000 options as we witnessed the end of an era in open outcry trading.
It is ironic that the same month that open outcry cotton trading came to a close today on a leap year (Feb 29th), we leaped almost 14 cents from the lows only 2 weeks ago.
This confirms that cotton has officially divorced itself from the traditional outcry fundamentals and we have finally entered the electronic hedge fund driven era where investment reaches such high levels that it outweighs the lack of demand.
Open interest should top 300,000 contracts on Monday which is 3 times higher than the 20 year average! We have not seen volatility at these levels, near 30%, since 9/11/01 and almost every commodity is trading at multi-year highs.
After failing to lockup the limit on two attempts, we still had a strong close as we continue to see good fund and trade buying on pull backs.
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.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
