David Fuller's view Further to my email of the day on Monday, in response to the query: "when is something cheap", cotton (weekly & daily) is a good price chart-based example of what Eoin and I prefer. Cotton has seen a persistent decline; it saw some potentially climactic acceleration in reaching a good psychological level at $100; it completed a downside failure and upside key day reversal yesterday; it has seen some upside follow through today and is currently showing a weekly key reversal as well.

I should also add that none of this guarantees that cotton will go up anytime soon. There has been some demand destruction following the previous spike above $200; farmers around the world have planted more cotton and some of these crops are successful. Nevertheless, the US crop will almost certainly disappoint for the second consecutive year. Short covering in cotton alone appears capable of supporting a further bounce. This afternoon, I opened a long position in December cotton, paying $103.505, including spread-bet dealing costs.

When silver (weekly & daily) was firm at mid-afternoon (BST), I placed breakeven stops as I had paid up for my most recent trades on Monday. These are always questionable money management decisions and I was also anticipating more volatility around the US debt ceiling end game, whatever that may be. Two of the stops were triggered a couple of hours later, taking me out of my more expensive purchases. Accordingly, sales at $40.750 and $40.558 occurred against my purchases at $40.650 and $40.533 on 25th July. I reopened these long positions at the slightly more favourable levels of $40.618 and $40.368. These prices include all spread-bet dealing costs.


Big downward dynamics on Wall Street today - While subject to the whims of Congress and the debt ceiling stalemate to date, today's reaffirmation of resistance near range highs for the Nasdaq 100 (weekly & daily) and S&P 500 (weekly & daily) indicate scope for further near-term weakness unless quickly countermanded by rallies back above this month's highs.