The cotton market nearly coughed up half of its Monday gains as turnaround Tuesday came into play. This event is considered a tried-and-true market phenomenon by traders over the years. Essentially, it suggests how ever the market trades on any given Monday, it behaves opposite on Tuesday. Although, it sounds a bit squirrely, the pattern has a higher level of reliability. Case in point is its appearance this week.

Traders are anxiously awaiting this week’s sales and exports data. This week’s report will reflect the time period when the spot market collapsed some 6.50 or so cents. It is reasoned if any demand is out there, it should have taken full advantage of that decline. Of course, beside big numbers, the psychological aspect that is needed is a meaningful appearance by China, but that doesn’t seem to be in the cards.

Technically, the market is mired down is a heavily oversold condition. In fact, so much so, managed money speculators have recently reversed their positions from that of net long to net short. Thus, until convinced otherwise, they are apt to defend their new stance by selling all rallies. For now, the trend is definitely their friend.

Tuesday, July cotton settled at 67.32 cents, down 0.59 cent, December closed at 66.90 cents, minus 0.75 cent and March went out at 67.61 cents, off 0.87 cent. Estimated volume was 24,400 contracts.