August 24, 2021

 Still Buying Cotton

One of the toughest trades for anybody to make is buying (or just staying long) a market that has been in a long bull move, especially when it has reached what might be considered a high price level…And that, today, is exactly where I am with Cotton.

I am still long. I am still buying it. And I know that I will find no one ( beyond myself, a 93 year old farmer who’s traded for 60 years, and one cotton broker) to take this trade, so this is just a quick “wasted” update, probably only of interest to any of you who grow or use Cotton.

As I have written for months, I have yet to see a bull market in Cotton that didn’t end with everybody in that business jumping up and down and screaming, “You gotta be long!” EVER…And when you get down to it, that’s pretty much true for every market we trade…At the top, everybody wants to be in and there are generally all sorts of arguments from analysts and traders, loudly citing all the seemingly “logical” reasons to be buying (like, for example, Soybeans several months ago when they were $2-$3 higher!)…AND THAT IS NOT THE CASE IN COTTON…Beyond the occasional voice talking 2-3 cents higher, NO ONE HAS BEEN BULLISH COTTON, PRETTY MUCH ALL THE WAY UP FOR THE PAST YEAR…AND THEY STILL AREN’T…And…IF COTTON WAS GOING TO STOP HERE, IT WOULD PROBABLY BE THE “QUIETEST” TOP IN THE HISTORY OF COMMODITY TRADING.

I CONTINUE TO SEE THIS MARKET MUCH HIGHER, AND CONTINUE TO RECOMMEND BUYING IT (although I know nobody will).

Options I like…

And this is an even better idea (that no one will take)…More expensive… but a better approach…

Call me if you want to know more.

And yes, I am still long and still buying Feeder Cattle, which yesterday made new contract highs in every contract month it trades…except the August, which goes off the board on Friday. I will get something out on Cattle within the next few days.

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.

The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Cotton