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February 21, 2008
Very briefly...
I am still long cotton and still very much a buyer.
After bottoming last year, then consolidating (painfully for me)
the past seven months, I believe it immediately has
an incredibly bullish look.
Soybeans are at $14.00, Wheat between $10.00 and $15.00, and
Corn is just over $5.00. All of those are MAJOR new all time
highs...Even so, with last year's 16 cent rally, Cotton is still
40 cents below it's $1.15 cent high made in 1995.
Cotton lost about 30% of its USA acreage last year due to
farmers shifting to other higher paying crops (all of which are
SIGNIFICANTLY higher this year)...which resulted in that 16 cent
rally...I would not be surprised to seeing an even
greater contraction in cotton acreage in the coming growing
season, and with it, an even bigger cotton bull move than we saw
last year.
Nothing is absolute in this business, especially technical
analysis, and there is nothing that says cotton cannot turn
around and go straight back down from here, but for my money,
the cotton chart you'll find below looks like it could be at
90-95 cents in relatively no time at all.
I'll try to get myself to write more on the subject tomorrow,
but it's 10:00 PM and I just want to get this in front of
anybody who even remotely believes in chart based trading...As I
said before, charts are definitely not infallible, but (as drawn
on the chart) I see a virtually perfect ascending triangle and a
monstrously bullish looking breakout...
I am buying both the May and July contracts, using,
as always, units of two calls and one put.
Take a look for yourself...Give me a call if you want to know
more.
Thanks,
Bill
866-578-1001
770-425-7241
Two calls and a put will cost about $3600 per "unit".
I wanted to address a few personal trading rules/observations I
have posted on my office walls that I think are pertinent
here...But it's late, so I'll just include them without
comment...Take them for what they are worth...
One good trade is all it takes...Try
to wait for it to appear.
The best way is going with it...Which
way is the market pointing you?
If you are not willing to buy both
sides (2 & 1), do not do the trade...
(I say cotton is about to be at 90...or back at 68)
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