Are Cotton Futures Gearing Up For Another Leg Higher?

December ‘21 cotton futures start the day in an increasingly narrow range as this week's consolidation continues. Recent sales and export data may indicate weak demand in the near term, and increasing strength in the dollar has weighed down the rally. With cotton prices being at levels some would consider inflated, many might have concerns this market is running out of steam. The chart, however, offers some hope. There is what could be a bull flag forming on the daily chart which many consider a strong bullish indicator. Prices would need to break out above Tuesday's pre-reversal highs before considering this market bullish again. However, there could be opportunities in the upcoming week with Tuesday’s USDA Supply and demand report being a strong potential catalyst.

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Eric Scoles

Market Strategist

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Blue Line Futures LLC 141 W. Jackson #2845 Chicago IL 60604

Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

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