BAL (cotton ETN) is on watch for a potential entry as an official long swing trade pending an impulsive/convincing & breakout in /CT cotton futures. As of now, BAL is only a Trade Setup with a possible entry pending.

BAL daily March 5th close

BAL daily March 5th close

Like most agricultural commodity ETNs, BAL rolls futures contracts to track the underlying commodity & as with most ag commodity ETNs, doesn’t do a perfect job due to factors such as contango, backwardation, costs of rolling the futures, etc. Many agricultural commodity ETNs are thinly traded as well and as such, limit orders are preferable over market orders. With that being said, a trader or investor really doesn’t have many options available for a direct play on specific commodities other than futures or the ETNs that track the futures.

CT daily March 6th

CT daily March 6th

Due to the less-than-perfect tracking of the underlying futures contracts, my preference is to use the chart of /CT (cotton futures) in order to hone in on the entry & exit points for a trade in cotton. While official trades on RSOTC are only individual stocks or ETFs, as not all traders have the experience, capital or access to trade futures, /CT cotton futures will trigger an objective long entry (as an unofficial trade) on a break above 75.00 which will also be a breakout above the downtrend line/falling wedge pattern.

FYI- I didn’t do a Charts I’m Watching update as other than cotton, there haven’t been any significant developments on any of the charts of interest that I’ve posted this week.

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