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April 10, 2025
Let the market tell you…
Last Friday, with the Dow down 2200 points, and having
dropped almost 4000 points in 3 days, and everybody scared to death, Cotton
showed what I can only call ASTOUNDING strength, and in fact put in a truly
HISTORIC UPSIDE KEY REVERSAL that very same day…and then followed that by
trading still higher this week, even while Stocks were getting pounded
before Trump’s statement yesterday…And that STRENGTH IN THE FACE OF PANIC COLLAPSE
EVERYWHERE ELSE, among several other factors, “tells me” that COTTON HAS
ABSOLUTELY BOTTOMED.
Nothing is absolute in technical chart analysis, but on
Friday, April 4th, with the Dow closing down 2200 points, Cotton traded
down 4 cents, then closed near its highs...on the HIGHEST ONE DAY TRADING
VOLUME IN HISTORY…This MASSIVE volume is essentially a combined function of
everybody who was long selling out, and then some of them going short, as
well as new shorts entering the market...with ALL of them having become
CONVINCED...on the low tick after a one year decline….that the market could
ONLY be headed lower. And THIS IS THE
CLASSIC DEFINTION OF A KEY REVERSAL AND EXHAUSTION LONG LIQUIDATION AT THE
BOTTOM.
And this big picture, long term chart is just STUNNING…
And then there is THIS…
And THIS…COTTON MOVES BIG
between now and the July expiration.
In fact, as can be seen
on the table following, since 1980 (45 contracts) July Cotton has had an
average high to low range of about 21.5 cents between February 1st
and the July expiration…by which I mean that there is 21.5 cents between it’s lowest price and its highest price during this 5
month period…And another way to put it is, like I said: COTTON MOVES BIG…And I
absolutely cannot see it doing anything except going up from here.
Here are the numbers
going back to 1980…You will note that there only 2 years, out of 45, with
less than a 10 cent range…with plenty in the Teens
and 20’S…and more.
|
Year
|
Total Range Feb-July
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1980
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22.87
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1981
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19.20
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1982
|
10.35
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1983
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15.36
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1984
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13.25
|
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1985
|
12.90
|
|
1986
|
13.65
|
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1987
|
32.49
|
|
1988
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13.85
|
|
1989
|
16.14
|
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1990
|
27.84
|
|
1991
|
25.72
|
|
1992
|
12.70
|
|
1993
|
12.77
|
|
1994
|
23.75
|
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1995
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43.45
|
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1996
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21.10
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1997
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8.65
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1998
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20.95
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1999
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22.05
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2000
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15.30
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2001
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14.90
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2002
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33.60
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2003
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11.26
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|
Year
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Total Range
Feb-July
|
|
2004
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31.30
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2005
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12.31
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2006
|
14.40
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2007
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14.10
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2008
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32.42
|
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2009
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19.45
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2010
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18.06
|
|
2011
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74.40
|
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2012
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33.60
|
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2013
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14.90
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2014
|
22.17
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2015
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7.63
|
|
2016
|
12.17
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2017
|
16.50
|
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2018
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16.75
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2019
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19.30
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2020
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22.87
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2021
|
18.07
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2022
|
55.95
|
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2023
|
12.03
|
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2024
|
34.83
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AVG
|
21.5
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Again…the average range
for the past 45 years is 21.50 cents…with the last 5 years averaging almost
29 cents…One more time. COTTON MOVES.
THIS IS WHAT I AM LOOKING FOR. I FIRMLY
BELIEVE WE HAVE SEEN THE LOW. AND THAT, CONSIDERING THE MOVEMENT WE ARE
SEEING IN ALL OF THE MARKETS, I THINK THAT JULY, AT A MINIMUM, WILL TRADE
UP AT LEAST THE 21.50 CENT AVERAGE FROM HERE…MINIMALLY.
To Clarify…
Those Record Commercial Longs DO generally mean
that large Cotton Brokers have big orders from either USA mills or foreign
concerns to deliver bales at some point in the future, but do not
yet have the Cotton...So to protect themselves from higher prices when they
do buy it, they buy futures now. The point is, per those big positions, they WILL
be needing a LOT of Cotton between now and July.
BUY THIS CALL OPTION
NOW….
DO THIS. Call me
and do something with this…
Thanks,
Bill
770-425-7241
866-578-1001
All
option prices in this newsletter include all fees and commissions. All
charts, unless otherwise noted, are by Aspen Graphics and CRB.FUTURES
TRADING IS NOT FOR EVERYONE. THE RISK OF LOSS IN TRADING CAN BE
SUBSTANTIAL. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE
FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST PERFORMANCE IS NOT
INDICATIVE OF FUTURE RESULTS. THERE IS NO GUARANTEE YOUR TRADING EXPERIENCE
WILL BE SIMILAR TO PAST PERFORMANCE.
The author of this piece currently trades for his own
account and has a financial interest in the following derivative products
mentioned within: Cotton
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