Cotton managed to set new highs on the open this morning breaking through a double top at 76.50. However, the market struggled with good scale up selling in the back months and eventually came off the highs but with the weak USD all the commodities closed the day in the green. Volume was good and the new year started off in the same direction as we have been trading the last 9 months.
Specs increased their long position slightly as can be seen on page 2 but open interest is unchanged and the market looks like it will continue to trade sideways until we get a better feel on China's demand. Equity markets tested the highs today and closed the day with nice moves higher across the board. There remains good support under the market near 74.25 and for now good resistance above 76.50 for the H'10 contract.