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July 24, 2025
BUY COTTON NOW
With a truly enormous
highest-volume-in-the-history-of-Cotton-trading KEY REVERSAL back in April,
and the fact that this market has been trading almost dead sideways since
December…in an unbelievably tight 3-4 cent range, I THINK THIS
MARKET, WHICH HAS BEEN ROUTINELY MAKING 30-50 CENT SWINGS GOING BACK 50
YEARS, IS POISED FOR AN UPSIDE EXPLOSION…and furthermore, if it is
NOT going up, I see the odds as miniscule that it will continue sideways
all the way into the December harvest…nor do I see the any real possibility
of any significant downside from these levels…
Nevertheless, knowing that I might be dead wrong…
WITH
THE COTTON MARKET HAVING BEEN SO SIDEWAYS, IT HAS RESULTED IN COTTON
OPTIONS BEING RELATIVELY CHEAPER THAN I THINK I HAVE EVER SEEN THEM…WHICH MAKES FOR A
LOT OF LEVERAGE…AS WELL AS BEING ABOUT AS PERFECT A “2 CALLS & 1 PUT
SETUP” AS YOU CAN EVER GET…AS THE MATH (SEE BELOW), COMBINED WITH WHAT I
SEE AS THE EXTREMLY HIGH PROBABILITY OF A MOVE, ONE WAY OR THE OTHER, MAKES
A VERY STRONG CASE FOR LARGE PERCENTAGE RETURNS…OR NOT LOSING MONEY (WHICH
OBVIOUSLY CAN HAPPEN).
One more time though…I say that Cotton is NOT going
sideways from here…
The LONG TERM CHART – 50
YEARS OF CONSTANT BIG SWINGS
Here is another way to go…
The idea there is that sooner or later, a bull
move IS going to start…And with the 1&1, even a 2 cent lower move could would probably allow you to recoup 100%, and then
immediately reposition long with 2 cent lower strike prices…
Also, if you just want to bet that Cotton will move at
least 6 cents in either direction between now and expiration, and you don’t
care which way it is…by the math, you could therefore turn the $2078 into
about $3000.
I WANT TO BE LONG…I CAN
PROMISE YOU…PRETTY MUCH NOBODY IN THE INDUSTRY IS AT ALL BULLISH THIS
MARKET.
As an afterthought, I have to think that with all of the
ongoing tariff talk, the fact that Cotton has NOT gone down is in itself
BULLISH. I mean, if with all the LOUSY news, it has held fairly rock solid, what happens if the
news starts getting better? Or if weather becomes a factor…My bottom line is I CANNOT IMAGINE THAT COTTON HAS ANY DOWNSIDE
FROM HERE…AND AGAIN, IT HAS BEEN
SIDEWAYS FOR 8 MONTHS…AND MY GUESS IS IT IS TIME FOR SOMETHING
TO HAPPEN.
Call if you want to know more.
Thanks,
Bill
770-425-7241
866-578-1001
All
option prices in this newsletter include all fees and commissions. All
charts, unless otherwise noted, are by Aspen Graphics and CRB.
FUTURES
TRADING IS NOT FOR EVERYONE. THE RISK OF LOSS IN TRADING CAN BE
SUBSTANTIAL. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE
FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST PERFORMANCE IS NOT
INDICATIVE OF FUTURE RESULTS. THERE IS NO GUARANTEE YOUR TRADING EXPERIENCE
WILL BE SIMILAR TO PAST PERFORMANCE.
The author of this piece currently trades for his own
account and has a financial interest in the following derivative products
mentioned within: Cotton
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