Without a doubt, cotton futures have one of the most violent and choppy patterns I have ever dealt with, and it’s been doing that as far back as I have found charts for.
What I see is that cotton prices loved the upswing of the solar cycle, but cotton prices sure didn’t like the downswing of solar cycle 24. The 2011 peak in cotton prices matches the first peak of solar cycle 24 after which its price crashed and still hasn’t recovered, except for small bear market rallies.
The impending end of solar cycle 24 is drawing cotton prices down and we could end up getting another Primary degree zigzag. Our present bearish cotton wave count still needs lots of work, but a new record low should happen.
I have not had to change wave 3 in Cycle degree for any reason, which is a good thing. Since the 2001 bottom cotton produced a great looking inverted zigzag. That’s what diagonal wave structures are all about and cotton shows us one zigzag about 10 years long.
I’m sure that this bear is going to continue for the next 1-2 years, but we want to wake up to cotton before solar cycle 25 starts.
BAL which is an ETF/ETN could be used to track cotton prices and it’s just as violent as the futures charts are, so be warned.
I have been keeping my eye on cotton for some time but as you can see it is such a wild diagonal market. I believe cotton is in a triangle but the exact location is a best guess at this time. I have records going back to the 1970s and without a doubt choppy wave strutures is the dominate theme. From the 2001 bottom a wild zigzag occured topping in 2011 right along with gold and gold stocks. I do have a very big Submillennium chart of commodities, and the entire general theme is diagoanl in nature. This did not smooth out until a bit until after the GSC degree crash in the mid 1800s. My Submillennium wave two ended in the Little Ice Age about 1500 CE. (Common Era)
This does not mean the entire Submillennium run is a 5th wave extension as it is just the nature of the beast in commodity land. You have to be very good at looking for, and identifying diagoal wave structures, as they will sneak up on us when all we can do is count impulse waves everywhere.
The commercials are short cottom by a wide margin so persuing a bullish wave count at this time is a lose-lose situation. I can’t pass up following any potential triangle as it is a very rare treat and excelent experience. This is the first attempt at counting out the cotton triangle so anything can still happen in the short term. The small “A,B” in Minor degree is an expanded pattern which eventually always get retraced.