This past week, the Dow Industrials lost 4.1 percent, the S&P 3.7 percent and the NASDAQ a staggering 6.5 percent. Last week's break pealed 40 to 60 percent off the gains for 2007. There are no government data or economic reports Monday, Veteran's Day. The bond market will be closed but stocks will trade as usual. Tuesday we get "sales of previously owned homes". Retail Sales and PPI are scheduled for Wednesday with the CPI on Thursday. The Fed reports on Industrial Production Friday.
Fundamentally, cotton prices continue to be torn between merchant sales on rallies against loan cotton and slow export sales and mill fixations on each dip. Unfixed mill purchases are at an all-time high. It is apparent that producer offering pretty well dry up and mill buying starts to kick in when December dips below 6400.
Nevertheless, the bull case is still dependent upon the speculative community continuing to be bullish and of course the need for cotton to buy acres from competing row crops. However, the severe losses in the stock market this last week fresh fears of recession began creeping in - bringing well founded apprehension to traders.
Technically, March, which now has the biggest open interest, broke the down trend line of a wedge formation. Prices set back Thursday and Friday into the sideways congestion pattern that has held prices hostages. However, the bulls are still in control as the 40 day moving average held and Friday's settlement was back above both the 9 day and 21 day moving averages.
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