ECOM daily cotton market recap - January 3rd, 2007
04 Jan '07
2 min read
Market was called lower from the opening based on a weaker close from Friday but mostly from the CRB index which was heavily in the loss column before the market opened. The H'07 opened only down 30 pts, but found itself down much lower after the reopen based on bearish trade options that took place leading to fund sell stops.
This triggered another wave of selling which found the market down over 200 pts on the lows of 54.10 only to rebound back on the close to settle down just 130 pts @ 54.89.
The profit taking in commodities was a big factor with the grains, gold, and energy leading the CRB to its lowest close since October 12th (298.06). Crude oil reached a low of $58.15 a barrel and gold to $627.30.
Volume was very strong between 30- 35,000 contracts as the profit taking was the main feature, but did find good support at the 54.10 level, which is almost a 50% retracement from the lows. We are still too high to attract any volume of new business, but will wait and see how the spec/hedge report looks on Thursday and the sales and exports on Friday.
Technically the market looks weak since it closed under the new trade channel below 55.00 cents, but the cool off might give the market another opportunity to test the highs if the funds remain aggressive, and especially since the trade needs NY to go higher to get a wider spread. We will see how the A index responds to the pull back in NY and this will also be a big actor in helping to stabilize the market or to move lower.
marketing@alchempro.com
