Weak Retail Demand Pushes Cotton Sharply Lower

Cotton Futures---Cotton futures in the May contract is trading sharply lower this Monday afternoon in New York down another 215 points or 4.2% at 49.18 continuing its bearish momentum hitting an 11-year low.

President Trump announced that we will remain in lockdown until April 30th as that absolutely kills retail demand for cotton and that is why you're seeing these prices drop rather precipitously and I don't think that situation going to change in the next 4 to 6 weeks.

If you are short a futures contract I would continue to place the stop loss above the 10-day high standing at 58.60, however the chart structure will start to improve on a daily basis therefor the monetary risk will be lowered substantially.

If you have been following any of my previous blogs you understand that I think prices could hit the 45 level in the coming days ahead as I see no reason to the long this commodity as this is one of the strongest trends to the downside out of all sectors so stay short if you are involved. Large money managed funds are short around 15,000 contracts as they still believe lower prices are ahead and they have been right so far.

TREND: LOWER

CHART STRUCTURE: IMPROVING

VOLATILITY: HIGH

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