Star of Bethlehem
A rare event will occur tonight, and weather looks good across Dixie for cotton traders to view the "Christmas Star" right after sundown.
Did the winter solstice put in a top for cotton, and a lot of other markets? Or perhaps it was that new strain of Corona discovered in jolly ol' England. For the moment, the shine is off cotton, and it appears a correction has begun.
Check out an editorial in the WSJ, 16 Dec, page A17, titled "Coercion in Xinjiang's Cotton Fields." It shines a little more light on how the Chinese army is using forced, child, and Uighur labor to produce cotton.
A lot of commodity markets and the stock market swooned on the news out of England regards a new strain of Corona. While not good, the strain is covered by the new vaccines, which are just now getting into circulation. Cotton has been on a tear recently, was overbought, and at 78c is a little lofty for a carryout of 5.5 Mb. Cotton still has an unattractive balance sheet that pegs it the ugliest girl in a room full of gorgeous balance sheet babes.
Mar has satisfied the major 62% retrace from the June 2018 high to the Apr low. That retrace is a few ticks above 7800, and 7741 looks close enough. A seasonal high is due on 1/02, so the market may become erratic and choppy. Today's turn down took out the lows of the last 3 days and has made a bearish engulfing signal. Last week's open and low is 7420, and a close below that would turn intermediate trend down. Traders can try a short on a bounce to 7535/7585.