s price rises continuously, in the second case even passing
"spot," whereas in the third case it falls first and then rises.
Instances might be given of its falling unintermittently. It seems a
plausible conjecture that if "futures" were "bulling" the market in the
first case, they were at least "bulling" it less in the second case
_ceteris paribus_, and probably "bearing" it in the last case. A closer
examination will reveal further that the magnitude of these gaps varies
a great deal; and if the "futures" do "bear" and "bull," as has been
supposed, they probably influence these magnitudes. It might be thought
that the "futures" of different months, being substitutes in proportion
to their temporal proximity to one another, should vary together
exactly; but it would seem to be a sufficient reply that as they are not
perfect substitutes they are in some slight degree independent
variables. The "spot" market might be judged generally as too high, in
view of crops and the probable normal demand of the year, but it might
not therefore drop immediately, owing partly to the pressure of demand
that must be satisfied instantaneously. "Current futures" would be
affected more than "spot" by this impression as to the relation of
"spot" to a conceived normal price for the year, and they might
therefore be expected to drop more than "spot" when this impression was
at all widely entertained. But the fall of "current futures" would be
checked by the demands that must be satisfied in the near future.
Probably the prices of the more distant "futures" are determined in a
higher degree by far-reaching imagination than the prices of nearer
futures. This explains what has been called above the unintentional
"bearing" of "spot" by "futures." And it is immediately evident that the
deliberate "bear" works by selling "futures," and that the effect of his
sales is propagated to "spot." These statements are equally true of
"bulling." The influence of expectations of the new crop on "futures"
running into the new crop is plain on inspection; but owing to the gap
between the two crop years it would be astonishing if "futures" against
which cotton from a new crop could be delivered were not appreciably
independent of "spot" at the time of their quotation. However, it is
noticeable that they are still so closely bound up with "futures"
culminating in the old crop year that the daily movements of the former
are closely correlated with those of the latt