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One Word: Cotton Or Reappearing Waterfall

2011/2/25 9:14:00 51

The near future

market

In a weak position, it is expected, but 24 days, especially in the afternoon, all commodities plummeted, indeed exceeded the market imagination.

Cotton main in September fell 30 thousand in an instant, accompanied by a substantial increase in holdings of more than 30 thousand hands, the same type of market prices, sugar also significantly increased positions broken down, rebar similar, three varieties

technology

Or close to the 60 day moving average, or have fallen below the 60 day moving average, and some other varieties, especially agricultural products such as corn, soybean meal and soybean oil, showed a sharp downward trend.

For cotton, in the case of a continuous break through spot price and approaching 24 days or even below the cost price, we should look at the two markets from a dynamic perspective.

In particular, there are no signs of stopping at the current market, and domestic cash is concentrated in the middle circulation.

Price

This is also a dangerous signal, which indicates that the latter market will continue to fall, which may be triggered by the spot market.

But before, we have repeatedly stressed the particularity of this year: the high cost of spot purchase, the existence of an overall gap in the whole year, and the continued depletion of hidden inventories in the past few years. These factors will support spot business confidence in a certain period of time, but this is not always the case. Along with the passage of time, the textile enterprises will continue to buy with the market in late November, or the situation that the massive replenishment of stores is slow to find. The pressure on the mentality of middlemen and the confidence of hoarding cotton will also increase.

At the same time, it is impossible to explain the current phenomenon if the current cotton market is simply analyzed from the perspective of annual total resource supply and demand.

The author believes that the long-term supply and demand often give way to phased supply and demand. Precisely because of this, behind the fuse "the US cotton continuous limit", it has led Zheng cotton to drop sharply by 4700 points over the 5 day from last Friday's high level. The amplitude is more than 13%. The more important factors, besides the systematic deterioration of investment sentiment caused by the tense situation in some countries such as Libya and other Middle East and North African countries, there are abundant supply in the domestic spot stage, including the import cotton concentrates to Hong Kong, and the spot market is still concentrated in the middle circulation link.

Based on the above analysis, we believe that the 30 thousand pass can focus on the degree of support, but from the short-term external atmosphere and the mentality of domestic spot enterprises, plus technical analysis, Zheng cotton next seeks 60 day average line support, and further finds the probability of the 27000-29000 platform integration.

Of course, we need to pay close attention to two factors for whether the market will fall again in the future. First, it is difficult to see whether the overall commodity will fall into a systematic decline. Secondly, the cotton spot market fundamentals, that is, the domestic spot market, presents a lot of selling behavior of hoarding cotton enterprises. Although there is a certain possibility, it is not likely to come before the end of the two quarter and the three quarter.