we have an new analysis There a new support and resistence line . if candlesticks test support line number is 1 , It would go to 2 resistence area ,
CT1! trade ideas
cotton about to go Higher in coming weekscotton is on the brink of a significant price increase, poised to break out of its current consolidation phase. The trading contract for July 2023 is currently being traded at a higher rate than the nearby contracts, indicating a premium price in itself. Notably, commercials are accumulating net long positions in the COT (Commitment of Traders) data, reflecting the most bullish sentiment seen since 2020.
These compelling factors, combined with robust fundamental data, lead me to anticipate a notable upward movement in the price of cotton within the next few days or weeks. However, it is important to acknowledge that predicting market movements carries inherent risks, as market conditions can swiftly change, and multiple factors can influence commodity prices
Cotton Need To Find BALANCE PositionCotton was very volatile recently due to the effect of many factors (Dollar Index, Crop condition, Demand from Down Stream).
In general, Cotton need to find a balance points before any new update in the market.
If you are spinner, it is better to wait the Cotton find a new consolidation / balance period.
It can be 92 - 95 or lower. We can not be sure about this. But at least, for spinning, this is not a good time for Buying.
$CT1! Cotton... ICEUS:CT1! Cotton!
Bless ya cotton socks, they say! I been checking the commodity index and things may get funky...
Now I went through sugar, that's looking like it's little over extended, now here's a beautiful chart of cotton!
Let's dive into technicals:
Pattern: Wedge
Highs: 90.15 Lows: 72
Now if we break the lows of 72, I expect 67.55 and then 62.25 areas. However, if we break above the highs of 90.15, I expect 95 and then 105 areas. Now, there are certain things to keep in mind, everyone is discussing it and I've started it since start of the year that key words: Stagflation....and there's another one recession! The market is forward looking...Those that understand economic cycles saw this coming and I well recommending researching into that, as much as technicals are important but it's really important to understand the type of cycle we are in and I had mentioned a little in my past week ahead videos!
Have a great weekend, it's long one for some of us! 🌞
Trade Journal
CT1! Potential For Bearish DropLooking at the H4 chart, my overall bias for CT1! is bearish due to the current price being below the Ichimoku cloud, indicating a bearish market.
Looking for a sell entry at 85.49, where the 23.6% Fibonacci line and overlap resistance is.
Stop loss will be at 88.88, where the recent high is. Take profit will be at 77.50, where the previous swing low is.
Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Everest Fortune Group’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Everest Fortune Group.
Cotton Futures ( CT1! ), H4 Potential for Bullish RiseTitle: Cotton Futures ( CT1! ), H4 Potential for Bullish Rise
Type: Bullish Rise
Resistance: 87.97
Pivot: 82.36
Support: 80.37
Preferred case: Looking at the H4 chart, my overall bias for CL1! is bullish due to the current price crossing above the Ichimoku cloud , indicating a bullish market. If this bullish momentum continues, expect price to continue heading towards the resistance at 87.97, where the recent high is.
Alternative scenario: Price may head back down to retest the pivot at 82.36, where the 23.6% Fibonacci line is.
Fundamentals: There are no major news.
CT1! Potential For Bearish DropLooking at the H4 chart, my overall bias for CT1! is bearish due to the current price being below the Ichimoku cloud, indicating a bearish market. Looking for a sell entry at 84.58, where the 23.6% Fibonacci line is. Stop loss will be at 87.97, where the 78.6% Fibonacci line is. Take profit will be at 79.78, where the 50% Fibonacci line and liquidity hotspots are.
Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Everest Fortune Group’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Everest Fortune Group.
Cotton Futures ( CT1! ), H4 Potential for Bullish RiseTitle: Cotton Futures ( CT1! ), H4 Potential for Bullish Rise
Type: Bullish Rise
Resistance: 87.97
Pivot: 82.36
Support: 80.37
Preferred case: Looking at the H4 chart, my overall bias for CL1! is bullish due to the current price crossing above the Ichimoku cloud, indicating a bullish market. If this bullish momentum continues, expect price to continue heading towards the resistance at 87.97, where the recent high is.
Alternative scenario: Price may head back down to retest the pivot at 82.36, where the 23.6% Fibonacci line is.
Fundamentals: There are no major news.
COTTON // rangebound martketThe market made a nice impulse up on the daily, and the correction of this long impulse brought the market into a range.
A break from this range may take the price higher into correction or deeper in the direction of the primary trend, but I would take profit on the short trades at the start of the daily corrective impulse, and wait for a countertrend to target the fibo target zones and the weekly north breakout.
Trade safe! ⚪️⚫️
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ANYWAY, a lot of Qs about the direction of the price. But it doesn't matter.
WE JUST REACT!
Remember that trading is a business.
SIZE your TRADES according to your risk aversion!
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Cotton coats for the winterHello friends.
The price of cotton has been shaved in half by 2 key factors:
1) Largest cotton consumer China closing down with the zero-covid policy
2) Expectations that a recession will reduce cotton demand
Looking at the current price, we think that it's very cheap and that a substantial move to the upside is on the cards. One thing I don't think the market is pricing in is the potential for China to reopen sooner than markets are anticipating. Obviously, this shutdown in China cannot be permanent and will end eventually. It's more a matter of when. And when it does, cotton should print a candle of +10% or even more in a single day.
The other thing that is being ignored by cotton speculators is the potential for producers to cycle through crops. Cotton producers do not have to exclusively be cotton producers -- in particular, they can and will replace their cotton crops with corn crops. This is because corn has only fallen a mere 17% while cotton is down 52%. If farming corn is more profitable, all rational cotton farmers who are able to make the switch will. When they do this, the supply of fresh cotton being created will be reduced.
Another factor impacting cotton is that it might not even be profitable to produce at this price -- the breakeven value is something like 70 cents on average based on what I'm seeing, but many producers are already drowning underwater. If it costs you $0.80 to make cotton, and cotton is trading at $0.75, you would save $0.05 by simply buying cotton rather than producing it -- so you will be forced to either pivot to the production of corn/other crops or to close down your farm for good. The lower the price goes, the more producers go underwater and are forced out of the business. Only the most efficient cotton producers who have the best land and technology will be able to keep going at these prices.
I also think that climate change will be a much longer-term driver of cotton prices in the coming years. A material example of this occurring is that cotton production in Brazil declined by 30 percent due to drought and heatwave. This lower yield and lower production puts a chokehold on supply and will only get worse as extreme weather and heat become increasingly more common and increasingly destructive to crops.
To be clear, we do think demand will decline somewhat due to a recession. People are going to be wasting less money on pointless consumption like clothes they don't need and will throw away, and will be more conscious of how they spend money. But the demand will still be there. The cotton must flow.
COTTON // short idea in a nice short trendCOTTON is going south. There was a stop at a weekly technical zone, but it was broken badly, so I assume price is heading south towards the next weekly zone.
Trade safe! ⚪️⚫️
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ANYWAY, a lot of Qs about the direction of the price. But it doesn't matter.
WE JUST REACT!
Remember that trading is a business.
SIZE your TRADES according to your risk aversion!
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COTTON // sideways after reaching weekly local lowHi✋🏽
Price has reached a weekly low from May '21, and buyers made it go 1-2 from the 1-2-3 wave. We are in the 3rd wave moving up, but price can easily go sideways for some time before breaking out of this zone.
The long and the short trigger zone marks the sideways channel.
What do you think???
Trade safe! ⚪️⚫️
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ANYWAY, a lot of Qs about the direction of the price. But it doesn't matter.
I JUST REACT!
Thanks for reading my analysis!🤘🏽
Remember that trading is a business.
SIZE your TRADES according to your risk aversion!
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Cotton Testing SupportCotton has been extremely volatile since the May 17th highs with recession fears and weather conditions driving the market lower. The market accelerates its pace lower after the breakdown point on September 1st and is now testing trendline support going back to September of 2021. As we are trading near support and in oversold territory, we could see another bounce to the upside as we saw the last time the market was in this oversold territory, but a close below 82.75 could be a catalyst for more sellers.
Supply bull vs. demand bear clouds cotton's outlookCotton prices have been very volatile in 2022. The three-month implied volatility on cotton is currently at 43.7% fast approaching the levels last seen in 2011. A pickup in volatility has historically been an important indicator of a change in trend.
Back in 2011, Texas (the biggest growing cotton state in the US) witnessed the driest year on record. The reason for the drought was the weather anomaly La Nina. The La Nina results in an abnormal cooling of waters in the equatorial Pacific Ocean that is linked to severe droughts in the southwestern parts of the US. In the wake of the drought, the US Department of Agriculture (USDA) cut its estimate of 2011/12 cotton production by 1mn bales to 17mn bales. Cotton prices reached a record 215.151 USD/lbs in response.
Drought plaguing US’s biggest cotton growing state
We are seeing history repeat itself with a persistent drought in Texas this year. The National Oceanic and Atmospheric Administration sees a 72% chance of La Nina between November and January raising the odds for a rare third-straight La Nina to form across the Pacific. USDA has slashed its supply projections for global cotton ending stocks by 1.5mn bales in 2022/23. Production is lowered nearly 3.1mn bales whilst consumption is reduced by 800,000 bales. US producers increased their cotton acreage by 11% this season to 5.05m hectares. But, with the drought becoming more severe over the last couple of months, the USDA expects that the harvested area won’t exceed 2.89m ha. The abandonment of 43%, if confirmed, will be by far the highest since USDA records began in 1960. Owing to historically high abandonment in the US Southwest region, US production estimates are forecast to reach their lowest level since 2009/10.
The US is the world’s largest exporter of cotton, having more than 27% share of the world export market. That implies that the fall in US production will dampen the world trade surplus, putting pressure on declining inventories.
Harsh climate conditions amongst key cotton producers threaten supply
Unpredictable weather patterns have been challenging the cotton crop outlook in other key producer countries as well. Drought is hitting China’s cotton crop in the Xinjiang province, which grows majority of the country’s crop. In China, ending stocks are estimated at 36.2 million bales in 2022/23, the lowest in 4 years2. Australia, Brazil, and Pakistan experienced untimely rains that have reduced a large share of their grades. The World’s stocks to use ratio at 68.25% is at its lowest in five years highlighting the constraints on supply with respect to demand.
Cotton’s demand outlook set to weaken amidst slowing global economy
Cotton consumption is likely to weaken amidst a challenging macroeconomic backdrop. Europe is on the brink of a recession and the European consumer will be exposed to soaring energy costs. Meanwhile the US consumer’s spending pattern is shifting away from goods to services. In China, the economic headwinds are multifaceted – from a weaking property market, intermittent covid lockdowns alongside supply shortages to strategically imported goods. The outlook for apparel and textile consumption looks tricky. Consumption in 2022/23 is projected lower than a month ago in the US, Pakistan, Vietnam, Turkey, and Bangladesh3.
Conclusion
Supporting prices higher has been the 25.8%4 rise in speculative positioning over the past month. A 12% unwind in short positioning alongside a 10% build up in long positioning underscores the improvement in sentiment towards the cotton markets. The front end of the cotton futures curve remains in backwardation with a positive roll yield of 3.2% versus 8.5% a month back. Evidently the supply situation remains tight however amidst a tougher macroeconomic environment cotton prices are likely to walk a tight rope. In order for cotton prices to stage a sustained move higher we will need to see an improvement in demand.
Sources
1 Source: Bloomberg as of 4 March 2011
2 Cotton Outlook August 2022, Economic Research Service
3 United States Department of Agriculture
4 Source: CFTC, from 19 July 2022 to 16 August 2022
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