Cotton Bulls Flexing Their Muscles

December cotton futures on the New York Board of Trade have seen a strong price uptrend develop from the May contract low of 51.60 cents. Prices on Wednesday hit a fresh 10-month high of 62.10 cents, but then backed off by the close. That level is now strong overhead near-term technical resistance. Bulls do still have solid upside technical momentum on their side, amid recent fund and speculator buying interest. Big recent rallies in the grain markets and crude oil prices hovering just below $70.00 a barrel have been supportive “outside markets” for cotton futures.

click the chart to enlarge
Cotton Futures
See on the daily chart for December cotton that the two shorter-term moving averages I follow (9- and 18-day) are presently in a bullish mode, as the 9-day is above the 18-day moving average. One early technical clue that the uptrend in December cotton is petering out would be if these two moving averages produced a bearish line crossover signal, whereby the 9-day crossed back below the 18-day moving average.
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