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Cotton #2 futures rallied today (8/01) as U.S. dollar index rallied.
This move lower for October cotton futures indicates a sell signal on the daily chart. The daily chart has been very congested; oftentimes the market breaks out the same way it entered into the congestion. On the weekly chart cotton gave a sell signal last week on the weekly chart and a sell signal in April on the monthly chart. Cotton has already suggested that it may be in a longer-term downtrend on the weekly and monthly charts.
High Grade Copper issued a sell signal on the daily chart today. Copper is often considered a barometer to the overall health of the market. A weak market may curb appetite for cotton consumption adding pressure to prices. Also, analysts have forecasted a large global cotton surplus which may limit upside potential.