4 weeks ago
Cotton is another commodity which over the past 20 plus days has performed admirably on the long side. There is a story behind the rise based on fundamentals and the decisions involving countries in Asia. Pakistan, India and China being the participants in this story.
3 weeks ago
I am replying back to myself but the Cotton price action really interests me.
The trend is very bullish and extremely strong from a 4 hour chart perspective.
It makes me laugh as if you go back six months or more then the media were reporting how Cotton prices should remain low, etc. This is what I call 'Market Noise'. One must ignore the media and literally park it to one side or not look at it when making any decision to enter or exit a trade.
Let the price action and trend determine your entry and exit points. Cotton is not just walking but running like an Egyptian!
2 weeks ago
Cotton is approaching $80.00. There are fundamental reasons behind the move as I have touched upon before such as Hurricane in Florida amongst other things.
Some have suggested 'Buy the Dip' strategy. As there has been a dip in the price action of Cotton and now it is hinting at a move upwards then it may be an opportunity for anyone to test such a strategy on Cotton.
The risk is that the trend has been in play since middle of November 2017 and we have seen plenty of upside so we do not know how long the upward move is still to run. However, experience has taught me that trends last longer than we all think and it is important not to exit too early. We want to maximise out profit and minimise our losses. It is the falls that are quicker and more ruthless. The rise in a trend can last many weeks, months and years.
Well Cotton hit $82.74 today. The trend is strong and bullish and if you look back at my posts this was coming.
From a fundamental perspective, the US has reported strong data for actual Cotton shipments as well as export sales. This is on the eve of a key report which is due tomorrow. Also there is speculative money flowing in Cotton and this combined with demand has led to this recent rally.
Tomorrow will be interesting with the USDA report. Apparently stocks have been tighter in India than USDA have reported but all will be clear tomorrow. It is worth watching the price action of Cotton tomorrow to see how it performs.