CT SPECIALIST · Softs / Demand
Z100400 – [CT] US Apparel Inventory Demand Z-Score Signal
US apparel retail inventory-to-sales ratio captures end-user demand slack for cotton-fiber products and transmits to Cotton forward 60-day returns via the downstream-demand channel.
At a glance
IN-SEASON · ACTIVE
Current reading
-0.910
SEASONAL STATE
IN-SEASON · ACTIVE
US Census MRTS monthly release drives signal refresh.
Signal state
Demand Strong Bearish Setup
423 days in Healthy phase
Updated
Nov 04, 2026
US Census MRTS monthly release
Sample
34-year window
Monthly cadence; 1992 onward
As of Nov 04, 2026. Updated nightly.
SIGNAL OVERVIEW
US Census Bureau Monthly Retail Trade Survey publishes the apparel-and-accessories retail inventory-to-sales ratio with multi-decade monthly history. The ratio rises when retailers accumulate unsold apparel inventory relative to sales (demand slack) and falls when sales clear inventory faster than restocking (demand strength). Downstream retail demand for cotton-fiber apparel feeds back through the textile mill ordering chain to Cotton futures over 60-day horizons. Daily Spearman IC against Cotton forward 60-day returns is minus 0.029 at p-value 0.007 across 8,451 observations, statistically significant on the 34-year sample. Phase plus 1 firings (high inventory, demand slack inverted bullish) deliver plus 1.11 pp above baseline. Phase minus 1 firings deliver minus 1.53 pp. 2.64 pp directional spread.
LIVE CHART
CT US Apparel Inventory Demand Z-Score Signal
What the chart is showing right now. The dark line is the US Census apparel-and- accessories retail inventory-to-sales ratio inverted and z-scored on a rolling window and tanh- bounded. Positive composite means inventory ratio above rolling mean (demand slack bullishly signalling mean-reversion setup); negative composite means below mean. The bronze line in the middle panel is ICE US Cotton No. 2 first-nearby. The bottom panel tracks the trailing 252-day Spearman information coefficient between the composite and Cotton forward 60-day returns.
COMPOSITE
-0.910 / tanh
STATE
Demand Strong Bearish Setup
PHASE
-1.53
PHASE +1 EDGE
+1.11 pp
PHASE -1 EDGE
minus 1.53pp
TODAY’S PLAYBOOK READING
STATE
Demand Slack
STATE AND HISTORY
Demand Strong Bearish Setup firing at composite -0.910, 423 trading days running in HEALTHY phase. Phase +1 (Demand Slack) delivers plus 2.08 percent fwd60d / plus 1.11 pp above plus 0.97 percent baseline. Phase -1 (Demand Strong) delivers minus 0.56 percent / minus 1.53 pp below baseline. Daily Spearman IC minus 0.029 at p-value 0.007 statistically significant.
THE DOWNSTREAM DEMAND MECHANISM
US Census MRTS tracks the apparel-and-accessories retail inventory-to-sales ratio. The ratio rises when retailers accumulate unsold apparel inventory relative to sales (demand slack) and falls when sales clear inventory faster (demand strength). Downstream retail demand feeds back through the textile mill ordering chain to Cotton futures over 60-day horizons.
HOW TO POSITION
Demand overlay for Cotton via the end-user apparel channel. Demand Slack firings flag mean-reversion bullish setups where retailer destocking cycles historically precede Cotton strength. Demand Strong firings flag bearish regimes where tight retail supply supports further textile orders but mean-reverts into subsequent weakness.
WHAT THE CHART SHOWS
The composite sits at -0.910 in the Demand Strong Bearish Setup band. US apparel retail inventory-to-sales ratio is running well below the rolling mean through 2026.
TOP INPUTS FIRING
- Primary composite -0.910 State Demand Strong Bearish Setup, 423 days running in HEALTHY phase.
- Apparel retail inventory running low relative to sales Raw z-score -1.53; US Census apparel-and-accessories retail inventory-to-sales ratio has run below the rolling mean through 2026 consistent with demand-strong regime that mean-reverts bearishly.
- Daily IC significant but modest, non-overlap not independent Daily Spearman IC minus 0.029 at p-value 0.007 significant on full distribution. Non-overlap IC minus 0.056 at p-value 0.51 not independently significant on 141 samples.
THE TAKEAWAY
What this means for you today
THE DEMAND CALL
Composite -0.910, Demand Strong Bearish Setup. US apparel retail inventory-to- sales ratio is running well below the rolling mean (inverted composite deeply negative) through 2026 with raw z at minus 1.53. Signal firing in current bucket for 423 days (extended persistence); forward 60-day edge historically runs minus 1.53 pp below baseline.
THE EMPIRICAL CONTEXT
Daily IC minus 0.029 at p-value 0.007 statistically significant on 34-year sample. Phase +1 (Demand Slack) delivers plus 1.11 pp above baseline; Phase -1 (Demand Strong) delivers minus 1.53 pp. 2.64 pp directional spread with monotone phase pattern.
THE HONEST CAVEAT
Non-overlap IC at 60-day sampling minus 0.056 at p-value 0.51 not independently significant on 141 samples. Signal is a mean-reversion overlay; demand conditions can persist for extended periods before reversing (current Phase -1 extended-persistence firing at 423 days). US Census MRTS 6-week publication lag limits short-horizon use.
THE REGIME MAP
The three phases, forward returns and sample share
Computed from 8,451 post-warmup trading days (1992 onward). Baseline Cotton fwd60d mean plus 0.97 percent. Phase +1 (Demand Slack) delivers +1.11 pp edge; Phase -1 (Demand Strong) delivers -1.53 pp. 2.64 pp directional spread with daily IC minus 0.029 statistically significant.
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| Demand Slack Bullish Setup | +1 | 41.0% (3465 d) | +2.08% | +1.11pp | 2023-24 (recent), 2020-21, 2008-09 | |
| On Trend | 0 | 26.4% (2227 d) | +1.14% | +0.17pp | various | |
| Demand Strong Bearish Setup TODAY | -1 | 32.6% (2759 d) | -0.56% | -1.53pp | 2026 (current), 2017-18, 2010-11 |
The historical pattern
Signature episodes in the 34-year sample
What this measures
Z-score of US Census apparel-and-accessories retail inventory-to-sales ratio on a rolling window, inverted, tanh-bounded. Positive composite equals inverted inventory ratio above rolling mean (demand slack bullishly signalling a mean-reversion setup); negative composite equals below mean. Target ICE US Cotton No. 2 first-nearby back-adjusted close.
Why it matters
Why US apparel inventory matters for Cotton
US Census Bureau Monthly Retail Trade Survey publishes the apparel-and-accessories retail inventory-to-sales ratio with multi-decade monthly history. The ratio captures end-user demand conditions one step upstream from Cotton futures. When retailers accumulate unsold apparel inventory, the textile mill ordering chain compresses and Cotton demand softens cyclically before mean-reverting as retailers destock and restock cycles reset. The downstream demand channel operates with a lag that fits the 60-day forward horizon.
How to use this signal today
Demand overlay for Cotton via the end-user apparel channel. Demand Slack firings flag mean- reversion bullish setups where retailer destocking cycles historically precede Cotton strength; Demand Strong firings flag bearish regimes where tight retail supply mean-reverts into subsequent weakness. Pair with supply signals (US Cotton Belt DSCI, India Vidarbha GRACE, Xinjiang precip) and CFTC positioning for stacked demand-plus-supply conviction.
Risk overlay
Daily IC statistically significant but modest at minus 0.029; non-overlap test minus 0.056 at p-value 0.51 not independently significant on 141 samples. Signal is a mean-reversion overlay; demand conditions can persist for extended periods before reversing (current Phase -1 extended- persistence firing at 423 days). US Census MRTS 6-week publication lag limits short-horizon use. Polarity is contrarian relative to the stated engine convention.
Signal consumers and siblings
Not investment advice · The analysis on this page is informational and educational. Signal readings, historical case figures, and empirical statistics are derived from publicly available data and are provided without warranty. Hypothetical performance results have inherent limitations, including the benefit of hindsight. Readers who intend to trade should consult a licensed investment professional and see the research brief for the full disclaimer.
Last refreshed Nov 06, 2026 07:00 AM ET