ItΆs hard to overstate the importance of the 70 cent mark holding for old crop. If you look at the monthly futures chart, thatΆs the last support zone established back in 2012 with multiple “tests” of the 70 cent mark, none of which could penetrate it.

But if we go through it now, thereΆs utterly nothing on the monthly chart by way of a “support” line or zone until the 2008 lows in the 40 cent area! No fundamentalist believes cotton will get THAT cheap, but strict technicians will have little choice but to declare that as the next technical target should we get two consecutive closes below 70 in the spot month.

Volume is light to non-existent, as shown on our own charts on this website. And it only takes a few trades in large lots to move the market. The failure of the Indian monsoon is touted by a few diehard bulls, but thatΆs largely mitigated by word last week that India plans to boost exports substantially higher than USDA has forecast in the last WASDE report. The trend is still down and the issue now seems to be how far below 70 December might drift before long liquidation is finally over and some bargain hunters arrive.ΆThe market is oversold and due for at least a technical “correction” anytime. Overdue in fact.