Cotton looks to have broken out of mid term channel

Cotton had been trading in a channel until late May before breaking to a recent low at 114.92 on 2nd June. The bounce back and subsequent retest of the upside of the trading channel is a classic test and failure with today’s action a new low and close below the 2nd June low. Odds dictate that we now test below 110c/lb and in quick fashion! The money is long and largely wrong now and a risk off mentality will likely prevail noting EAP comments from the weekend. Stay short expecting 110c minimum and maybe 103 to 108 range area before any meaningful bounce!