* Chinese holidays in October make next move uncertain

 * Market stumbles on profit-taking correction

 * Trade awaits cotton export decision by India
 (Adds closing prices, updates and writes through)

 NEW YORK, Sept 23 (Reuters) - Cotton futures closed lower
for the second straight day on Thursday due to heavy investor
profit-taking and the fact that players from No. 1 consumer
China were away for a holiday and are not coming back to the
market until next week, analysts said.

 "Cotton is getting a much, much overdue setback," Sterling
Smith, an analyst for brokerage Country Hedging Inc in
Minnesota, said.

 The next move of the market will depend to a great deal on
what the Chinese do when their financial markets reopen on
Monday, the impact of U.S. weather on the ongoing cotton
harvest and the extent of cotton exports from India, the
world's No. 2 producer of the fiber.

 Cotton prices had hit 15-year highs the last three
sessions, trading above $1/lb each day. Strong demand from
Asia, tight stocks and investment fund buying propelled the
rally.

 ICE Futures U.S. key December cotton contract CTZ0
dropped 2.45 cents, or 2.46 percent, to finish at 97.17 cents
per lb, trading in a band from 96.82 to 99.71 cents.

 Total cotton volume traded stood at 25,883 lots at 2:45
p.m. EDT (1845 GMT), some two-thirds above the 30-day average
of 15,517 lots, according to preliminary Thomson Reuters data.

 (Graph on cotton falling on profit-taking, heavy volume:
here)

 "Trees don't grow to the sky," Ron Lawson, a cotton expert
at commodity firm logicadvisors.com in Sonoma, California,
said, calling to mind an old commodity trading cliche.

 "This thing has had a dramatic run, (so) people are taking
a breather here," said Bill Raffety, an analyst at commodities
futures brokerage Penson GHCO in New York.

 The Chinese were out of the market due to the Mid-Autumn
festival from Sept. 22 to 24 and then they will be on holiday
again from Oct. 1 to 7, so many major players may not be around
next week either. [ID:nL23389078])

 As for India, the market is waiting to see whether it will
export more than the 5.5 million (480-lb) bales the government
has said it will allow, and whether those exports would begin
on Oct. 1 or on Jan. 1, 2011.

 Data from ICE Futures U.S. showed no large-scale
liquidation of positions in the cotton market at the close on
Wednesday, and the trade would want to see how many positions
were liquidated in Thursday's action.

 Open interest rose 2,298 lots to 237,218 lots as of
Wednesday and analysts believe that may well be trade accounts
covering their short positions in the market as the bulk of the
rise was in March, the next most-active cotton contract.

 The market took note of the U.S. Agriculture Department's
weekly export sales, which showed total U.S. cotton sales at
571,700 (500-lb) running bales, above trade belief it would
range from 300,000 to 400,000 RBs.

 Market bulls believe strong demand from overseas buyers and
buying by funds who feel prices will pop back up should
continue to boost cotton, but bears believe the upcoming U.S.
harvest and cotton exports by India should dampen the surge.

 Farther out, the steep rise in prices was seen by industry
publication Cotlook as leading to a rise in cotton sowings in
2011.