Notas del Mercado de Algodón por: Jurgens Bauer 01/10/08

Looking for additional pressure and further correction

After grinding higher for so many days cotton prices finally took a late dive, (see 5 minute chart below). I think there is more to come. Now this downward move is likely to be only a correction, (remember prices have advanced pretty steadily for many days without one), so it’s not unusual and actually healthy.

What will be interesting is the reaction in the spreads, H/k, and H/Z, as well as how funds respond. Look for aggressive shorts to press values and knock weak longs out.

I believe that type of action will sufficient pressure on March for it to slip a little further and importantly more so than either May of Dec. It truly has a chance of dropping back down to test for support around 6700. Regular readers should already know that I have been touting weakness for in March and even have suggested buying puts. I hope you did. If you need option quotes, by all means call me. I earn my keep by executing customer orders.

As I said yesterday, “Look for a correction, or a break out of the trend channel on the downside to carry as longs take profits and shorts get the idea that they can be more aggressive. Owning puts, especially cheap ones available in March makes sense as the risk reward appears lively.” How far it may go is anybody’s guess, but when it finds support, look for a bounce from short covering to be assisted with a new round of longs getting put on.

Support: 6810-6790, 6665

Resistance: 6966-7000, 7035-55

Si quiere más información, por favor contáctenos,

Maria Aranda

El equipo de Brokers de Futuros USA
Email: mararanda@mfglobal.com

TEL: 312-261-7395

Fuente: MF Global

©2007 Jurgens Bauer & Associates all rights reserved.

Jurgens Bauer

 

 

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