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Archive for the ‘Futures’ Category

Long Cotton via Cotton ETN $CT_F $BAL

Posted by Dino on January 23, 2011

For the past 6 months or so I’ve been keeping a closer eye on commodity futures, primarily Ag contracts such as corn and wheat but also cotton, soy, cotton, sugar and coffee.  Cotton caught my eye last week as it looks like it’s setting up in a very familiar technical pattern.

Cotton futures rallied to all time highs in early November before a significant pull back and a retest of those highs in late December.  This pullback and retest set up the cup and the handle was established at  a 38.2% retracement and now a third test of all time highs.  I’m really liking this setup and wanted to get a piece of it but unfortunately I don’t have a futures account.  The only way I could do this is through the cotton ETN BAL.  Though not a perfect mirror of cotton futures you can get the majority of the movement of the underlying.

A couple  of major hurdles to get over is the lack of liquidity and extreme volatility in BAL.  3 month average volume is about 70k shares per day and with so few shares it can be difficult to get out at the price you may want.  With all of these factors in play I’ve kept my share size quite small and set a fairly loose stop of about 70.   A price target for cup and handle can usually be estimated by adding the height if the cup to the neckline level.  That gives us a target of 203 for the futures and if that’s what develops, so be it.  That’s not going to be my initial target so I’m going to peel off a portion around 90 and let the rest run to the $200 C&H price target for the cotton futures and close the remaining portion.


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Sunday Futures – 9/12/10

Posted by Dino on September 12, 2010

In the first few hours of the weeks trading, futures gap up indicating some strength in the market to begin the US trading day tomorrow.

The S&P Futures popping up above last weeks resistance.

Dow popped up above some previous resistance but not completely.  Still has a little ways to go to take out the 9/7 high.

Nasdaq seeming to show the most strength last week, is continuing that trend.

Russel is having a hard time making any headway.

It is still early though and we’ll see where we end up in the morning.  We still have a bit to go to make some higher highs.

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