Coffee - Will the support-line continue to protect the downside?
Coffee has been in a major correction since the 100.95 low in early November 2014. This correction has turned into a double zig-zag correction, where wave w ended at 207.55, and was followed by an expanded flat correction in wave x and then the second zig-zag higher in wave y.
Looking at the relationships between wave w and y, we can see that wave y became almost exactly 61.8% the length of wave w.
The internal relationship between wave y waves show, that wave c was equal in length to wave a.
At the same time a clear negative divergence has been seen on the RSI indicator, both long and short term.
Finally a five wave decline can be counted from the 225.45 top to the 188.45 low , indicating a trend-reversal has taken place. After a correction towards minimum 201.30 and possibly even 204.70 and new powerful decline should be seen in wave iii lower to 135.35, where wave iii will be 161.8% the length of wave i.
I will now look for a three wave correction, which should be sold for the next impulsive decline.
Looking at the relationships between wave w and y, we can see that wave y became almost exactly 61.8% the length of wave w.
The internal relationship between wave y waves show, that wave c was equal in length to wave a.
At the same time a clear negative divergence has been seen on the RSI indicator, both long and short term.
Finally a five wave decline can be counted from the 225.45 top to the 188.45 low , indicating a trend-reversal has taken place. After a correction towards minimum 201.30 and possibly even 204.70 and new powerful decline should be seen in wave iii lower to 135.35, where wave iii will be 161.8% the length of wave i.
I will now look for a three wave correction, which should be sold for the next impulsive decline.
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