Another up and down day on light volume settling around unchanged. The market is just unwilling to make any big commitments in their position until we have some more guidance on price direction. Cotton prices first tried to test the 64.00 cent level without luck and eventually the 63.00 cent level which also failed to take out the low from Friday.
Volume was very light today with only 12,000 futures and 7,000 options as the market continues to tread water as the downside momentum slows and the bulls are hoping that we have put in a bottom near this level.
Export sales on Thursday are expected to be friendly with rumors of good sales being done after the market moved lower on Friday. The dollar put in a strong day and this pushed oil prices lower as well as the grains and metals. The stock market continues to rally as the commodities give back some of the overbought profits from the recent record highs.
The market is very vulnerable at the moment and there are some nervous bulls and bears waiting to see if we start to form a sideways range at these prices or look to test the downside.
month uptrend line on the H'08 chart, but with the recent slow down, we are approaching the 9-day moving average. RSI is about 32%, but the specs are still 18% long. Depending on the dollar and if demand picks up, we may be looking at a good buying opportunity short term.
However, the market is driven more currently by the specs and we have sell signals at the moment that will not allow them to jump back in aggressively unless we can hold these levels.
marketing@alchempro.com
