The 11th Hour
A well-publicized “rumor” says a tariff delay and a partial trade deal will come Sat night. OK, but after 18 months of this, reaction will be more of relief than ecstasy. In sympathy with our view on the CRB and a load of Aug/Sep major lows, CNBC fast-talker Jim Cramer is bullish. “2020 will be a very good year for this bull market.”
A year ago Dec 19 traded 7775/7225 from mid Dec to early May. Ratios between corn and soy were also a little higher. Dec 20 is near 68c today, about 5c to 9c below year ago, and it is doubtful the market will push into that price range from a year ago. But Dec 20 could ease a little closer, and try to reach ballpark 7000. The world does not want, or need, 5 years in a row with world carryouts all at 80 Mb. A forward thinking farmer will take 7000ish and hedge a little.
Don’t forget that “full cold kiss moon” event this evening. Peak viewing time is 1100 CDT.
Cramer is bullish the Board, and RJO tech analyst Toth has turned bullish cotton (see below). We agree with Toth’s chart favoring a 5th coming, with targets above recent highs, maybe in the 6850/7000 area for Mar. The problem we have is that the world balance sheet is not a bull, and at some point one has to question the huge number of sales on the books. Markets often overshoot, and given a chance to sell Mar at 7000, we would love that opportunity. For now, the technicals appear to be a little friendly, and specs who are quick and savvy can go with the flow. Farmers should be trigger happy if Mar does approach 7000.
From Dave Toth, tech analyst for RJO. The market remains deep within the middle half bowels of the past month and half 6713-6370 range that could persist laterally. Fri recovery above 26 Nov 6614 initial counter trend high confirms Nov sell off attempt from 6713 to 6370 as a 3 wave affair as labeled in the chart. Left unaltered by a relapse below 6370 this 3 wave decline is considered a corrective affair that warns of a resumption of Aug-Oct major reversal and uptrend that preceded it, reinforcing our long term base reversal count. We’re identifying 21 Nov 6370 low as our new key risk parameter this market is now minimally required to fail below to threaten this bullish call enough to warrant defensive measures. We anticipate a resumption of the 4 month uptrend to new highs above 6713.
325 Cotton Row Cleveland MS 38732
As always, please use protective buy and sell stops when trading futures and options.
Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.