Another down day as we wait for some good news to come out of the equity markets. For now there is some uncertainty in the banking sector if the interest rate hikes could be coming sooner than later. China is still hinting at tighter policy Europe still looks vulnerable to further weakness. Volume was average today but open interest continues to fall as the COT report on page 3 is showing further reductions of index fund longs.

Export sales were strong last week with over 300k but demand this week has started to slow down and price ideas are changing. Based on the weak technicals and amount of cotton bought recently, mills are willing to sit back and wait for further drops as we get closer to Chinese New Year. We may see some sideways consolidation at the support near 70 cents as we wait for more direction from the USD and equity markets.