ECOM daily cotton market recap - December 29th, 2006
30 Dec '06
2 min read
Market was called unchanged on the open as H'07 was able to post a gain up to 57.05, but after that it was difficult to find buyers as there were negative options taking place that put pressure on the market.
The market found support around 56.50 and stayed there most of the day until a huge sell order hit the market which sent the market to the lows based on trade and spec selling.
The market found support almost 130 pts. below the highs and managed to settle at 56.19. Volume was thin at only 8,000 lots, but options made up for it with a combines 10,000 contracts.
Export sales and shipments were in line with expectations of only 127,000 total sales of which only 6.000 were made to China and shipments of 167,000.
The market has been feeding on technical and firm A index considerations as the A index did rise another 81 points today, but this will be canceled out against the new cheaper southern hemisphere quotes coming in next week.
There was probably not much redeemed this week for that reason, but there will still be speculative trade scale up selling if the market does try to retest the highs and the 5700 mark will represent 1100 points and mange to free up more cotton if we get there.
Technically we were overbought and needed a pull back which caused some nervous trade and specs to take profits.
The higher open and lower close produced a bearish engulfing pattern based on the candlestick chart. This could set up the market for further losses next week as we see how interested the index funds are to keep money in cotton in 2007. We closed early today and the Cotton Exchange will also be closed on Tuesday for the funeral of former President Gerald R. Ford.
On behalf of ECOM USA, we hope everyone has a happy and safe New Year holiday and will be back in the office on Wednesday January 3, 2007.
marketing@alchempro.com
