Did you know that Cotton prices have more than doubled since the September period when the first rumors of QE2 were released?
Cotton is a market most of us never chart, but it’s doing something interesting right now in terms of a Three Push Pattern and nice Bearish Engulfing Candles.
Let’s take a look at the past few months in Cotton, see it double in price, and take a look at the current and past bearish engulfing candle patterns which are rare but fun when they form.
First of all, Cotton shows us how a commodity can trend better than a stock at times, in terms of its non-stop series of higher price highs and lows (the definition of a trend).
Beyond that, I wanted to do a fun update of cotton that shows a present and past Bearish Engulfing Candle pattern. These are among my favorite candle patterns, particularly if they form at some resistance level or are accompanied with negative divergences....MORE
Saturday, February 5, 2011
Bearish Engulfing Candles and Trend Structure in Cotton
Cotton has had such a dramatic run I was contemplating going against the trend. It closed Friday at $1.6786 down four cents. Here's something to think about from Afraid to Trade: