Strong cotton

COTTON (NYBOT:CTK14)

May Cotton continues to look strong as price action on the charts has been maintaining the higher high, higher low technical structure indicative of a bull trend environment. After pulling back to support at 91.91 during yesterday’s session, the market quickly recovered and now look to take out the 93.28 level of resistance. Above here, there is not much in the way of price in terms of technical pivots and the cotton market could conceivably make a push for 100.00. With that being said, the 93.28 level could present some problems for bulls as price has tried unsuccessfully to break through this level on several occasions and the markets has been relatively range-bound between 93.28 and 91.91. Keep this in mind when gauging trading opportunities today in the cotton market.

 

(May ’14 Cotton 30-minute Bar Chart) (eSignal)

EURO (CME:E6M14)

The Euro has taken quiet a hit in the wake of Wednesday’s FOMC’s meeting announcemenet, which triggered a violent rally in the U.S. Dollar Index (NYBOT:DXH14). Technically speaking, the market has broke below the 13842 support pivtot negating the near term positive momentum that previously controlled the market. With that being said, the next significant area on the chart appears to be the support band from 13709 – 13719. If this market is going to find a way to reverse the “tailspin” it has been in over the past two days, this area will be one of the best candidates for support. A break below this area could warrant concern of an intermediate directional trend change in the Euro as price would be making a relatively lower low on the chart. The RSI has swung down to the 60-20 range and the current retest of 13800 coincides with a swing up to the 60 reading in the RSI, which could highlight a potentially selling opportunity in the Euro. Until price can regain its footing, the higher probability opportunity appears to be on the short side of the Euro.

(Jun. ’13 Euro Currency 30-minute Bar Chart) (eSignal)
 

E-MINI RUSSELL 2000 

The Russell has been acting a bit choppy lately; however, the underlying bias remains positive for U.S. Indices across the board. Ideally, a new high above the 1212.70 level in the Russell would serve as confirmation of underlying strength in the market, but at the present time, price has been more or less digestive in nature. Another thing to keep in mind is that the equities are getting ready to roll over to the June contract, so volume in the March will begin to lighten up a bit. In terms of technical levels of significance, keep an eye on the 1193.00 pivot as well as 1187.50 as two potential levels of support for this market. Another potential pivot from which traders could look to buy the Russell is at 1195.70. There appears to be an ascending trend channel forming in this market, which could add additional weight to a bullish argument. The intermediate term direction bias remains positive above 1162.30 and a new high above 1212.70 could help verify the underlying bullish sentiment in this market.

 (May’14 E-mini Russell 2000 30-minute Bar Chart) (eSignal) 

About the Author
Erik Tatje

Erik Tatje is currently a market strategist at RJO Futures and is the author of The Tatje Report, a daily technical correspondence. He has been an affiliate member of the Market Technicians Association since 2011 and has passed all three levels of the Chartered Market Technician (CMT) program. Erik can be reached at etatje@rjofutures.com or 312.373.5176. Learn more at www.rjofutures.com.

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