'Dangers and Opportunities' under the Long-Short Game in the Cotton Market

Recently, the bulk commodity market has been turbulent, with prices continuously 'divingHow to interpret cotton prices in the future, some people say that 'the epidemic will not dissipate, and the price will not be affordable'.　　 The author believes that this crisis is undoubtedly a great benefit for investors, because only when such a major event is encountered can commodity prices (including cotton) appear such a low level, so there is no need to panic too much. Before the holiday, the price of Zheng cotton was eager to try. The CF2009 contract price has a tendency to rise by 15,000 yuan/ton. However, under the “care” of the epidemic, the cotton price continuously dived, and the lowest fell to 12,650 yuan/ton, which was less than two weeks. More than 2,000 points were leaked, and the market turbulence exceeded most people's expectations. At this time, some people panic closed their positions, while others took the opportunity to jump into the rare 'golden pit'. It is also a crisis, some people hurriedly avoid danger, and some boldly buy. For the same market, different analysis angles lead to very different results. Regardless of right or wrong, it is reasonable to observe this round of rise carefully. The foreign epidemic has already had some turning points. South Korea, Japan, and Italy, which are the most severely affected, have raised the epidemic to the highest level, which means that the epidemic is causing the government and the whole people. The highest priority. The domestic epidemic prevention and control has proved that as long as the government pays enough attention and adopts the most powerful prevention and control measures, the epidemic will definitely be controlled. Others believe that due to differences in political and cultural systems, it is difficult for foreign countries to adopt such strong prevention and control measures as my country. The author believes that in the critical moment of life and death, people have the same desire for life, and their ability to prevent and control cannot be underestimated or even doubted. Therefore, it is not necessary to exaggerate the impact of the epidemic. Of course, this global epidemic will indeed have a negative impact on the cotton market, because restraining consumption will inevitably lead to price declines. In a market-based price operation mechanism dominated by supply and demand, supply and demand will inevitably regain the game, resulting in a new The equilibrium state, and this equilibrium will appear in the form of new prices. The price is stable, indicating that the new price formed has been recognized by the market, otherwise it will continue to fluctuate and adjust until it stabilizes.　　 Before the outbreak, the contract price of CF2009 basically fluctuated around 14,000 yuan/ton. Now affected by the epidemic, the price has dropped to around 13,000 yuan/ton. It can be seen that in the short term, the price decline will promote a new equilibrium between supply and demand in the cotton market. But how long can this short-term equilibrium be maintained? Before the financial crisis broke out in 2008, the cotton price fluctuated around 16,000 yuan/ton. After the financial crisis broke out, the cotton price fell to a low of 10,080 yuan/ton, and it took nearly 8 months for the cotton price to drop by nearly 6,000 yuan. Subsequently, it took 5 months for the cotton price to recover to 13,000 yuan/ton (up about 3,000 yuan), and it took nearly a year to recover to 16,000 yuan/ton (up about 6,000 yuan). This shows that, in the face of such a serious global economic crisis, cotton prices are at the bottom for a limited time.　　 This time, the cotton price basically did not continue to repeat after falling, but rebounded directly. Of course, on the one hand, governments of various countries have introduced interest rate cut policies to save the market through “release water”; on the other hand, given the previous experience and laws, the price will return sooner or later, so don’t worry too much. Earlier, some people kept calling out that the cotton price could reach 11,000 yuan/ton, and they were desperately waiting for the bottom hunt, but the market just didn't give a chance. The reason is simple. Both the long and the short are in a game. Once the general public has formed a consensus on the decline of the originally low-priced commodities, the market will often move in the opposite direction. The 28th law tells us that the truth is often in the hands of a few people.　　 In summary, the kinetic energy of cotton price decline has weakened, and the upward force is increasing. Of course, the price will fluctuate repeatedly due to demand constraints in the short term. However, I believe that if the cycle is extended, the future cotton price can be expected. Article Keywords: 　Cotton