I said yesterday that despite the incredible thrust in the nearby contracts last week, the rocket stalled at March highs and the chart now looks like there may have been a “double top” created on the weekly cotton chart. It looks even moreso after today and now weΆve got fundamental developments that support the technical action shown below:

If this selling continues and we next drop below the broken downtrend line, that will be confirmation the big two-week rally was a fluke and that it was a mistake to lift hedges as I advised. But then, thatΆs also hindsight. I had no way of knowing China might suddenly change its reserve policy as noted above, or that drought-breaking rains would suddenly develop for parched Texas. But both events occurred and it would be a disservice not to acknowledge that and put price protection back on as part of good risk management.