NEW YORK, Dec 22 (Reuters) - U.S. cotton futures ended the
daily limit down Thursday in technical selling, as players took
cash off the table in the best performing commodity of 2010 in
time for the Christmas holidays, analysts said.

The market will be closed on Friday and reopen on Monday at
7:30 a.m. EST (1230 GMT).

The key March cotton contract on ICE Futures U.S.
fell the 6.00 cents limit for the second straight day, to
finish at $1.4812 per lb. Volume was modest as it stood at
about three quarters of the 30-day norm of 29,200 lots, Thomson
Reuters preliminary data showed.

Still, the market was the best performing commodity in the
Reuters-Jefferies commodity index, up over 75 percent year to
date. (Graph: http://link.reuters.com/kew48n)

The market gyrated wildly throughout the session. It fell
the limit in Asian trade, came back on investor buying to trade
higher on the day midway through the session, and then
collapsed late when investor interest faded, traders said.

For the first time since early December, the market ended
down on the week, falling about 1.33 percent.

'It's a manic-depressive market,' Sharon Johnson, senior
cotton analyst at commodities brokerage Penson Futures in
Atlanta, said.

She said that technically, the market left what is called
an 'island reversal top,' a name derived from the fact that the
candlestick pattern on a contract chart appears to be all
alone, as if on an island.

Technical traders believe that heralds a sharp fall in a
market that has seen a bull run. A report by Johnson said 'if
the gap ... is not filled (at) $1.5594 to $1.567 (basis March),
this very bearish signal should hamper efforts by bulls' to run
the market higher.

'It is investor liquidation before the Christmas break and
also profit-taking,' said Ker Chung Yang, an analyst at Phillip
Futures in Singapore.

Cotton was also pressured by weak Chinese cotton prices,
with the May cotton futures on the Zhengzhou Commodity
Exchange last done at 27,800 yuan per tonne, down 265 yuan on
the day.

The market recovered during the session partly because of
robust export sales in the U.S. Agriculture Department's weekly
export sales report.

Total U.S. cotton exports hit 405,400 running bales (RBs,
500-lbs each), well above the trade outlook for a range from
150,000 to 200,000 RBs.

Options trading in the cotton market was halted for the
fourth day running because the spot month in the cotton futures
market traded at its daily limit, ICE Futures U.S. said.