Finally some volatility to finish off the week, although most of the floor traders more concerned about the future of the NYBOT due to the Intercontinental Exchange (ICE) bid to buy out the NYBOT members for a deal close to $1 Billion.
The deal would basically acquire each NYBOT seat for $1M each, including cash and ICE stock. Will be interesting to follow these developments, as the acquisition would rapidly accelerate plans to introduce electronic trading into Cotton.
Futures prices started out the day down around 10 points, and in similar fashion to yesterday, drifted a little lower on virtually no volume whatsoever.
Prices pushed down to the 52.30 area in the first hour, and a sufficient lack of follow through selling saw prices float back to unchanged.
By this stage though a large short position amongst the locals needed liquidating, and this dragged prices up towards the 53.00 area, pushing as high as 53.45 to finally see some volatility in prices.
Prices finished the day in the plus column for just the 3rd time in 3 weeks, closing with gains of 44-49 points in the active months. Estimated volume was decent at 9,200 lots.
Technically the December is starting to slow down it's down trend, with the two up sessions this week making it look more consolidating.
Today's session in fact has the marks of an outside day bullish reversal. On saying this we have barely seen Cotton respond to bullish pattern, so we will not hold our breathe next week.
For the record, momentum is neutral, with the RSI moving up to the 42.89 level. Monday's close at 52.00 is for now looking as a temp bottom, and we can continue to expect good support around this level. Taking out this price will quickly open up a move to contract lows at 51.15.
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