I have not talked about the Cotton market much lately. As you can see we have been in a nice uptrend, with a beautiful trend line containing the price action for several months. We also have had a good amount of commercial selling during the last leg of this rally upward. As you can see we are below the trends in all the momentum indicators, and had an up close today. A break from this setup the also breaks the trend line should be a very nice short entry.
We appear to have begun the commodities meltdown that I have been talking about in here and first mentioned about a month ago. I pointed out that virtually every major commodity market except Natural Gas had significant commercial selling going on and that I had not seen that before. Now that we have a dollar rally that appears to be underway, it should logically follow that we will have a break down in the commodities markets.
Silver has just been slaughtered this week reinforcing the point I made about it's relative weakness to Gold. I am just hoping the metals bounce here and just don't go straight down 50%, which could easily happen. This is the biggest trap I have ever seen in all my years of trading, and it appears at the moment the trap has been sprung. Gold bulls will not give up easily, but if they can stage a rally and it fails, look out below you will see a fall like most of you probably never have seen. We will see $100 down days in this market soon I think.
Of course I am apparently alone in this opinion as far as I can tell, yet I did make quite a bit of money in that short trade I posted here even though I exited it poorly. My concern is about making money, not being right or wrong. That is for cocktail parties.