From the Desk of Ian Culley @IanCulley
Watch out for cotton!
Back in February, I highlighted a bullish setup in cotton futures.
Buyers were hammering a key retracement level from below. The way I learned it, "The more times a level is tested, the higher the likelihood it breaks."
Three months later…
The July contract is knocking on the door – again!
How polite.
Check out July cotton nearing the January 2022 closing high of 88.34:
That’s my level.
If and when the July contract breaks above 88.50 (let’s give it a little room), I like it long with an initial target of approximately 106. I’m also watching for a 14-day RSI reading greater than 70 for bullish confirmation.
Not all contracts are approaching buy zones this week. Copper and crude have come under increased selling pressure. Gold undercut a former support level.
In fact, most of the commodity space lacks any sign of constructive rotation.
But have you seen a chart of sugar or cocoa futures lately? Soft contracts have been working!
Regardless, I’m going to keep it simple, trade what’s in front of me, and continue buying smiley faces.
Are you buying an upside resolution in cotton?
If not, why?
Let me know what you like out there. I love hearing from you.
COT Heatmap Highlights
- Commercial hedgers hold a three-year record short position in cocoa.
- Commercials added 27,980 contracts in soybean oil to hit a fresh three-year extreme.
- And commercials are roughly 1,000 contracts short of their largest long position for copper in three years.
Click here to download the All Star Charts COT Heatmap.
You need to have a subscription to access this content in full.
Log in or
subscribe
