Daily Reports

October
25
2013

Thursday, October 24, 2013

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Dec. 13 continued its downward descent today through the 80.00 and 79.00 levels, bottoming for the day at 78.76 and settling at 79.21 for a loss on the day of 148 points. For tomorrow the limit for all ICE cotton futures contracts will be 300 points. The catalyst of today’s further decline in price was the belated US export report for the week ending Oct 3 this morning by USDA-FAS; net upland sales were abysmal at a mere 44K RBs. Yet, it was likely less the 44K figure and more the 72.8K RB figure for cancellations that sparked the selloff. Our outlook period forecast currently suggests that either continuation of the downtrend or brief consolidation period is the most likely path for Dec 13 in the near-term. Our proprietary conditional probability analysis, for tomorrow, concurs with the Average True Range technical indicator in signaling for increasing market volatility within Dec 13 trading action tomorrow.

October
23
2013

Wednesday, October 23, 2013

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Dec. 13 moved through support at 82.11 and 81.72 today as the front month settled at 80.69, for a loss on the day of 176 points. Dec 13 traded within a 232 point trading range (80.52 – 82.84), that was largely on the negative side of yesterday’s settlement. Volume quickened today for Dec 13 as well as across all active contracts, with approximately 26.7K and 38K lots traded for Dec 13 and in aggregate, respectively. OI decreased again on Tuesday; OI was approximately 115.2K and 202.3K for Dec 13 and across all active contracts, respectively. The standard technical picture for Dec 13 is bearish. However, the US dollar, as measured by the standard index value, remains weak. Physical on-call sale fixations against Dec 13 may also help to slow further downward movement, but continued long liquidation of Dec 13 coupled with US harvest pressure will probably mitigate attempts at upward momentum.

October
23
2013

Tuesday, October 22, 2013

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Dec. 13 moved through support at 83.60 and 83.50 today as the front month settled at 82.45, only 1 point off its daily low. Dec 13 traded within a very tight 61 point trading range (82.44 – 83.11), that was nearly all on the negative side of yesterday’s settlement. Volume slowed today for Dec 13 as well as across all active contracts, with approximately 8.1K and 11.9K lots traded for Dec 13 and in aggregate, respectively. OI decreased again on Friday for Dec 13 as well as across all active contracts in aggregate. OI was approximately 116K and 202.4K for Dec 13 and across all active contracts, respectively. Mar 14 gave up 53 points on the day, as it traded within a restrained 58 point range (83.69 – 84.27), the net effect leaving the Dec 13 – Mar 14 spread weakened at (127) on the day (down 8 points from yesterday). ICE certificated stocks increased significantly again today to stand at approximately 86.3K bales; approximately 38K bales are currently awaiting review for certification. The Cotton Outlook A-Index was flat today at 89.40. CZE-traded cotton in China settled modestly higher overnight while PTA, a major precursor to polyester production, finished lower. For tomorrow, our overall analysis predicts that the most likely directional outcome is a loss on today’s 82.45 settlement. Our outlook period forecast currently relays that, with today’s support break, daily high, low and settlement values for Dec 13 are likely to move lower in the near-term. There is nothing, technically, that suggests that Dec 13 will move swiftly higher to challenge overhead gaps. Our proprietary conditional probability analysis, for tomorrow, does not concur with the Average True Range technical indicator in signaling for decreasing market volatility within Dec 13 trading action tomorrow, particularly to the downside.

October
22
2013

Monday, October 21, 2013

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Dec. 13 moved slightly lower today as the front month eased down 5 points to settle at 83.06. Dec 13 traded within a very tight 60 point trading range (82.80 – 83.40), making its high during the overnight hours. Volume slowed today for Dec 13 as well as across all active contracts, with approximately 8.6K and 14.7K lots traded for Dec 13 and in aggregate, respectively. OI decreased again on Friday for Dec 13 as well as across all active contracts in aggregate (Mar 14 OI was up slightly); OI was approximately 117.2K and 203.5K for Dec 13 and across all active contracts, respectively. Mar 14 gave up 7 points on the day, as it traded within a restrained 58 point range (83.98 – 84.56), the net effect leaving the Dec 13 – Mar 14 spread very slightly weakened at (1.19) on the day (down 1 point for yesterday). ICE certificated stocks increased significantly again today to stand at approximately 70K bales; approximately 40K bales are currently awaiting review for certification. The Cotton Outlook A-Index gave up 52 points to settle at 89.43. CZE-traded cotton in China settled modestly lower overnight; PTA, a major precursor to polyester production, was finished lower as well. The technical picture for Dec 13 continues to remain weak. However, the US dollar, as measured by the standard index value, remains weak as well and Dec 13 has failed to settle below 83.00 during the recent downtrend. By some technical indicators, Dec 13 also exhibits an oversold condition as well. Fundamentally, Dec 13 absorbed a significantly bearish increase in this season’s Indian production estimate from the CAI and still failed to move to new lows for the downtrend while only settling 5 points lower on the day. For tomorrow, our overall analysis predicts that the most likely directional outcome is a gain on today’s 83.06 settlement. Our outlook period forecast currently relays that while further price dips to test previous resistance at 82.50 and lower may occur, settlement values near those levels is unlikely in the near-term. There is nothing, technically, that suggests that Dec 13 will move swiftly higher to challenge overhead gaps. Our proprietary conditional probability analysis, for tomorrow, concurs with the Average True Range technical indicator in signaling for decreasing market volatility within Dec 13 trading action tomorrow.

October
19
2013

Friday, October 18, 2013

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Dec. 13 moved significantly lower today as the front month tumbled 71 points to settle at 83.11. Dec 13 traded within a 157 point trading range (82.83 – 84.40), making its high in the overnight hours. Volume quickened again today for Dec 13 as well as across all active contracts, with approximately 11.2K and 18.4K lots traded for Dec 13 and in aggregate, respectively. OI decreased again on Wednesday for Dec 13 but increased across all active contracts; OI was approximately 119.1K and 204.5K for Dec 13 and across all active contracts, respectively. Mar 14 gave up 65 points on the day, as it traded within a 153 point range (83.94 – 85.47), the net effect leaving the Dec 13 – Mar 14 spread weakened slightly, settling at (1.19) (down 6 points) on the day. ICE certificated stocks increased significantly again today to stand at approximately 56K bales; approximately 49K bales are currently awaiting review for certification. The Cotton Outlook A-Index was up 50 points to settle at 89.95. CZE-traded cotton in China settled lower overnight; PTA, a major precursor to polyester production, was finished lower as well. For Monday, our analysis predicts that the most likely directional outcome is a gain on today’s 83.11 settlement. Our outlook period forecast currently relays that while further price dips to test previous resistance at 82.50 and lower may occur, settlement values near those levels is unlikely in the near-term. There is nothing, technically, that suggests that Dec 13 will move swiftly higher to challenge overhead gaps. Our proprietary conditional probability analysis, for tomorrow, concurs with the Average True Range technical indicator in signaling for decreasing market volatility within Dec 13 trading action tomorrow.

October
17
2013

Thursday, October 17, 2013

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ec. 13 moved significantly (and suddenly) higher today as staunch support just above 82.50 and a tanking US Dollar Index gave forced it higher to ultimately gain 66 points on the day and settle at 83.82. Dec 13 traded within a relatively normal 135 point range (82.57 – 83.92). Volume quickened today for Dec 13 as well as across all active contracts, with approximately 10.9K and 17.9K lots traded for Dec 13 and in aggregate, respectively. OI decreased again on Wednesday for Dec 13 but increased across all active contracts; OI was approximately 120.7K and 204.1K for Dec 13 and across all active contracts, respectively. Mar 14 gained 67 points on the day, as it traded within a 143 point range (83.70 – 85.13), the net effect leaving the Dec 13 – Mar 14 spread weakened slightly, settling at (1.13) (down 1 point) on the day. ICE certificated stocks increased significantly again today to stand at approximately 48.8K bales; approximately 43K bales are currently awaiting review for certification. The Cotton Outlook A-Index was off 30 points to settle at 89.45. CZE-traded cotton in China settled lower overnight; PTA, a major precursor to polyester production, was finished lower as well. The technical picture for Dec 13 is remains weak, today’s strong finish notwithstanding. However, the US dollar has weakened significantly and uncertainty concerning US debt default and further benchmark information from USDA has been removed (although information flow remains currently interrupted). We view these as positive factors. For tomorrow, our analysis predicts that the most likely directional outcome is a gain on today’s 83.82. However, we would not be long north of today’s pivot point (83.44). The distribution of the tomorrow’s Dec 13 trading range is expected to be nearly symmetrically distributed with an upward bias for very large moves. Our outlook period forecast currently relays that while further price dips to test previous resistance at 82.50 and lower may occur, settlement values near those levels is unlikely in the near-term. There is nothing, technically, that suggests that Dec 13 will move swiftly higher to challenge overhead gaps. Our proprietary conditional probability analysis, for tomorrow, concurs with the Average True Range technical indicator in signaling for decreasing market volatility within Dec 13 trading action tomorrow.

October
16
2013

Wednesday, October 16, 2013

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Dec. 13 moved lower today as previously staunch support just above 83.00 gave way to ultimately lose 55 points on the day and settle at 83.16. This is the lowest Dec 13 has finished since Sept 5. Dec 13 traded within a relatively tight 105 point range (82.93 – 83.98). Volume quickened today for Dec 13 as well as across all active contracts, with approximately 10.7K and 16K lots traded for Dec 13 and in aggregate, respectively. OI decreased again on Tuesday; OI was approximately 122K contracts for Dec 13 and approximately 203.8K across all active contracts. Mar 14 gave up 41 points on the day, as it traded within a 92 point range (84.36 – 85.13), the net effect leaving the Dec 13 – Mar 14 spread weakened, settling at (1.12) (down 14 points) on the day. ICE certificated stocks increased significantly again today to stand at approximately 38.4K bales; approximately 41.5K bales are currently awaiting review for certification. The Cotton Outlook A-Index gained 5 points to settle at 89.75. CZE-traded cotton in China settled modestly lower overnight; PTA, a major precursor to polyester production, was finished lower as well. For tomorrow, our analysis predicts that the most likely directional outcome is conditional on trading action overnight and the early daylight hours (US). The strength of the US dollar subsequent to the temporary debt resolution may very well be a major factor in tomorrow’s trading action. The distribution of the trading range is expected to be nearly symmetrically distributed. Our outlook period forecast currently relays that further price dips to test previous resistance at 82.11 and 81.78 is the most likely path for Dec 13 in the near-term, although this does not necessarily mean tomorrow. There is nothing, technically, that suggests that Dec 13 will move swiftly higher to challenge overhead gaps, however. Our proprietary conditional probability analysis, for tomorrow, concurs with the Average True Range technical indicator in signaling for decreasing market volatility within Dec 13 trading action tomorrow.

October
15
2013

Tuesday, October 15, 2013

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Dec. 13 moved slightly higher again today, gaining 10 points as it traded within a very tight 66 point range (83.42 – 84.08). Volume was heavier today for Dec 13 as well as across all active contracts, with approximately 7.6K and 12.2K lots traded for Dec 13 and in aggregate, respectively. OI decreased again on Friday; OI was approximately 123K contracts for Dec 13 and approximately 204K across all active contracts. Mar 14 gained 13 points on the day, as it traded within a tight 77 point range (84.36 – 85.13), the net effect leaving the Dec 13 – Mar 14 spread widened, settling at (0.98) (down 3 points) on the day. ICE certificated stocks increased significantly today to stand at approximately 35.3K bales; approximately 35K bales are currently awaiting review for certification. The Cotton Outlook A-Index gained 25 points to settle at 89.70. CZE-traded cotton in China settled mixed overnight; trade data for PTA was not available today. For tomorrow, our analysis predicts that the most likely directional outcome is another gain, although without a proper response from congress it will most likely be modest. The distribution of the trading range is expected to be symmetrically distributed, although news from negotiations on the debt crisis could skew it significantly in either direction. Our outlook period forecast currently relays that positive movement is the most likely path for Dec 13 in the near-term. There is nothing, technically, that suggests that Dec 13 will move swiftly higher to challenge overhead gaps, however. Our proprietary conditional probability analysis, for tomorrow, concurs with the Average True Range technical indicator in signaling for decreasing market volatility within Dec 13 trading action tomorrow.

October
14
2013

Monday, October 14, 2013

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Dec. 13 moved slightly higher again today, gaining 24 points as it traded within a tight 59 point range (83.38 – 83.97), that was completely on the positive side of Friday’s settlement. Volume was lighter today for Dec 13 as well as across all active contracts, with approximately 7.1K and 9.3K lots traded for Dec 13 and in aggregate, respectively. OI decreased again on Friday; OI was approximately 124K contracts for Dec 13 and approximately 205K across all active contracts. Mar 14 gained 34 points on the day, as it traded within a tight 55 point range (84.30 – 84.85), the net effect leaving the Dec 13 – Mar 14 spread widened, settling at (0.95) (down 10 points) on the day. ICE certificated stocks increased significantly today to stand at approximately 24.3K bales; approximately 24.1K bales are currently awaiting review for certification. The Cotton Outlook A-Index gained 15 points to settle at 89.45. CZE-traded cotton in China settled mixed overnight; PTA, a precursor of polyester production, settled slightly higher overnight. For tomorrow, our analysis predicts that the most likely directional outcome is conditional on Dec 13 support either failing or holding by the early trading hours of Monday morning. The distribution of the trading range is expected to be, technically, skewed negatively, although Dec 13’s behavior near the 83.00 mark could result in a positively skewed distribution. Our outlook period forecast currently relays that market contention of demonstrated historic support levels near 83.00 is the most likely

October
11
2013

Friday, October 11, 2013

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Dec. 13 cotton futures moved slightly higher today, gaining 20 points as it traded within a tight 92 point range (83.17 – 84.09), that was completely on the positive side of Thursday’s settlement. Volume was heavier today for Dec 13 as well as across all active contracts, with approximately 9.9K and 15.1K lots traded for Dec 13 and in aggregate, respectively. OI decreased again on Thursday; OI was approximately 125K contracts for Dec 13 and approximately 205K across all active contracts. Mar 14 gained 21 points on the day, as it traded within a 81 point range (84.09 – 84.90), the net effect leaving the Dec 13 – Mar 14 spread widened, settling at (0.85) (down 2 points) on the day. ICE certificated stocks increased significantly today to stand at approximately 20.6K bales; approximately 38.4K bales are currently awaiting review for certification. The Cotton Outlook A-Index was flat at 89.40. CZE-traded cotton in China settled higher overnight; PTA, a precursor of polyester production, settled higher overnight as well. For tomorrow, our analysis predicts that the most likely directional outcome is conditional on Dec 13 support either failing or holding by the early trading hours of Monday morning. The distribution of the trading range is expected to be, technically, nearly symmetrically skewed, although Dec 13’s behavior near the 83.00 mark could result in either a positive or negative skew for tomorrow. Our outlook period forecast currently relays that market contention of demonstrated historic support levels near 82.11 and 81.72 is the most likely path for Dec 13 in the near-term, although a daily settlement near those levels is not currently suggested by our analysis. Our proprietary conditional probability analysis, for tomorrow, concurs with the Average True Range technical indicator in signaling for decreasing market volatility within Dec 13 trading action tomorrow.