Wednesday, July 13, 2011

Exit the BAL Trade

The short on BAL/cotton has made a large move down and made a nice large gain on short positions since entry. We saw a large gap down two days ago which may be an exhaustion gap considering the technical picture. Then the last two days (counting today) look like a morning star candlestick pattern from deeply oversold territory.

While I would like to have seen the 55.00ish low taken out for the trade exit, I respect the signal here. Additionally, there are several other markets that look set up to potentially short if commodities do resume a larger downtrend.

Exit BAL today with a market order. The blog exit price is 67.40.

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