Vigilance Against The Impact Of The Black Swan Incident On Cotton Prices

The current market is refreshing our three views every day. The US oil has fallen to negative numbers. It has never been seen in history. It is undeniable that the hunters have suffered heavy losses. As I mentioned in yesterday's article, the risk of "gold pit" is huge because it may fall into the abyss of eternal redemption at any time. The fall of crude oil prices once again warned us that there will be many black swans in the future.

The reason for this oil price collapse is very complicated. It has geopolitical influence and big power game factors. Oil prices are never dominated by supply and demand fundamentals. The impact of this oil slump on the world economy is obvious, especially under the new crown virus, which outbreaks the power of a large equivalent economic nuclear bomb. After a period of sustained anti slide, Zheng cotton was no longer able to hold back and fell below the 10 day moving average. Where the future is heading, and whether or not it is the two time, it means at least that it will take some time to recover in the future.

Yesterday, I mentioned in my article that macroeconomic data and cotton consumption data are very important in May. In late April, there is no sign of turning point in the global new crown, and the number of infected people has been rising rapidly. Some people predict that the inflection point of the epidemic is the bottom of the commodity price. At present, the bottom of the market is really false, and the market needs to be verified. All investment logic has become extremely fragile in the face of the black swan event. It is foreseeable that the economic and consumption data in April will not improve much. In today's economic globalization, the world economy is on a chain. If a country breaks down, it will be difficult for other countries to be independent.

Now cotton is a famous brand. The data of supply and demand released by various agencies can be seen everywhere. The operation of the whole cotton industry chain is getting worse and worse. Since it is a famous brand, the significance of careful analysis is limited. It is possible to correctly predict and judge the cotton price trend in the future if we catch the thief first, capture the snake and hit seven inches. The biggest problem in reality is that the trend of the epidemic is flickering around, and no one knows what will happen next. At this time, patience is particularly important.

Under the influence of the new crown epidemic, the Central Bank of the world started a big water diversion, judging from the stock market and commodity price movements, the effect was not satisfactory. Under inflation expectations, we should be more vigilant against deflation caused by price declines. Especially when the low oil price rate is deflating to the world, it will be more vulnerable to weak economies.

As Dickens said, "this is the best era. This is the worst of times." we need not worry too much about the future, nor should we be too vigilant. The oil incident has alerted us again. In such a chaotic environment, there will be other black swans. The most important thing is to keep the force alive.