Market traded sideways most of the day in a narrow 55 point range until a firm close pushed the market to the highs of the day which was the highest close in 5-weeks. Going into the long 4-day weekend, the market feels comfortable being long with 4 trading days left in the year.
We will probably see further upside next week as all the markets today including grains, energy and metals were trending higher today as we get closer to the year end. Volume was average with 17,000 futures and 8,000 options as the market continues to push the upside of the current trading range.
ICE will be closed on Monday and Tuesday so this will leave us to assume the Wednesday after such a long weekend may be quiet on a lack of new information. There was almost 7,000 decerts today which brought the total of cert stock under 550k.
There are rumors there are more buy stops above the market and we predict that the specs may be closer to 20% long after they have added to positions this week and open interest has risen almost 15,000 contracts or 7%.
Export sales and shipments will continue to be light as short term fundamentals are bearish, but long term acreage for cotton is looking very bullish for the 08/09 season with some estimates calling for another 20% cut in acreage.
Technically we broke the resistance at the 66.50 cent level, and continue to hold the upside trend line started last week. RSI is close to 60% and the specs are adding back to their long position. The 7 day and 21 day moving averages crossed which technically will give the specs more incentive to add further to their long positions.
However, there will be plenty of scale up trade selling which will keep a lid on the market short term. We may see the market trade sideways in a 63/67 cent range as we get through the holidays and into the new year.
marketing@alchempro.com
