Wednesday  21 October 2009

Cotton hardly ever shows up on our radar, so we missed the set up that got
under way last week when price rallied concurrently on the monthly, weekly,
and daily charts, through the 65.50 area.   These kinds of market set-ups
tend to have good runs.  There was a small correction  on Monday, but price
quickly turned back up.  Sometimes, one just has to get the trade on and
then see what develops.

We recommended the long side of cotton on Tuesday at 67.65, paying up
early in the day.  In a good trade, the trend will often mitigate against
initiating a position at a higher price.  Cotton has the potential to make a
run at the all-time highs, 91.38, from March 2008.  If that price level is
achieved, we are getting on the train as it is leaving the station, as it were.

What are the fundamentals that will drive this market higher?  We haven’t a
clue.  All we see is a great chart set-up that has a high probability outcome,
and The Tape says this is a “go-with” trade.

We are going with.

CTZ W 21 Oct 09