COT report shows specs are about half as long as they were before the Mar liquidation, so there is plenty of room and size to pile on. Demand keeps feeding the bull, and the cert stocks will shortly be drawn out by 60% of the total.
Nothing changes for W TX, but overall the picture is much better for the US. A month ago there was drought across just about all of Dixie, but Feb rains were plentiful and just about all cotton areas east of Abilene are saturated or adequate.
The month of Mar is chock full of big price reversals, mostly highs. A year ago a spot high was made on 3/16, and a high for May was made on 3/20. A major low was made on 3/10/2016. An int low was made 3/18/2015. An int high was made 3/15/2015, and an int high was made 3/26/2014. We expect cotton to make a run at the Jan highs.
Commentary from Toth:
This tight but objective risk parameter at 80.67 may come in handy given the market’s proximity to the extreme upper recesses of the past month-and-a-half’s 84.31 – 756.44-range. If there’s a time and place for this market to “fail”, it’s here and now. This said, until and unless the market PROVES weakness with a failure below 80.67, at least the intermediate-term trend is up and should not surprise by its continuance to new (5th-Wave) highs above 84.31 as, indeed, the extent and impulsiveness of the current recovery reinforces our longer-term bullish count that contends that Jan-Feb’s sell-off attempt was just a 4th-Wave correction within a broader Elliott sequence up to at least one more round of new highs above 84.31.
These issues considered, a bullish policy remains advised with a failure below 80.67 required to threaten this specific call enough to warrant moving to a neutral/sideline position and avoid the depths unknown of a correction or reversal lower. In lieu of such sub-80.67 weakness we anticipate further gains above 22-Jan’s 84.31 high and to indeterminable heights thereafter.
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