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Coffee

Things point to 140 for now (2nd month continuation)Looks down to the 140 area for a test. However as long as the orange or blue trends hold, the upwards trend is still intact IMHO. short call spreads above 165 in Dec or January might be a good idea. I would buy any puts as downside seems limited for the moment and option volatility might decline during a sell off diminishing returns on long option strategies. 1x2 put spreads 10 to 15 cents wide for flat selling the 2 buying one over two month could be good IMHO
KShort
by mjhillpp
2
Coffee Tactical Low in New Bull CycleI am bullish Coffee since a series of bullish momentum divergences started to develop in February, March and April. As with other commodities, I am convinced that the early 2016 lows were important cyclical lows. I am therefore bullish Coffee long-term. The weakening US Dollar should further support the entire commodities complex. The latest correction brought the futures back to an important breakout level, which was succesfully tested. The next swing in coffee futures should target 169/170, although it may fade at 160. An interesting trade, nevertheless. ETF Idea in New York: JO ETF Idea in London: 3CFL ($-listed, 3x times leverage, risky) Best,
KLong
by gorillacharts
KC shortUpdate on a upsloping trendline (blue) which acts as resistance On the 5 hour chart, we should have generated a sell signal. I still remain short via puyt spread 1x2s, as frost is no longer an issue. It appears the market is still digesting this from last week and should correct lower IMHO as physical supplies out of Brazil remain steady. Warehouse stocks in EU and US plenty as well. Dont get me wrong, as shown in the blue channel, even if we have a correction lower, the blue trend channel might indicate a change in trend, however the frost damage is simply not there and in order to rally, this market would need breaking news like that.... without anything of that sort coming out, I see a correction lower before making new highs. Still, knowing coffee, I remain short with 1x2 calendar spreads, buying the downside 1 leg in one month and selling 2 lower puts in a month further back.
KShort
by mjhillpp
2
No frost in BrazilSeems like no frost in Brazil. It was a busy weeks last week and throughout the weekend with fears a frost could hit coffee areas. None has been confirmed and worst fears did not play out. Once all of this is digested I expect some downside opportunities as the market goes back into trading technicals rather than emotions. Quite oversold and we saw sell signals on RSI and Stochastik a while ago. Also, the 5 hour chart will provide with a sell signal, which has been a superb indicator of short term price action (5-10 days). I am short via 1x2 calendar put spreads, long the 135s in Q and short the 125s in U and various other like this. As we move lower, option vega will come in and provide some nice profits. Also, selling the Sep (U16) contract provides with some good premium as this is considered the frost month. Looking at futures spreads, they have been weak the past two trading sessions and also foreshadow price action. Support at 134, then nothing until 125
KShort
by mjhillpp
5
Sweet Coffee Set For Shortage And higher PricesAs a former commodity trader, I do have love for the agricultural commodities. Coffee has been rising in price since late last year when local coffee prices in Brazil started rise. At the time futures prices were falling. This year reports out of South America sight a beetle, that is devouring coffee plants, it is most certain that Arabica will show a shortage. Harvests have been poor so the availability of fresh coffee will soon be a problem. Does anyone else see Coffee above 135?
KLong
by GreedyTrader
4
Still waiting, beware bulls; risk reward not so greatPro Long (Chart): - RSI and Stochastik created buy signal - Orange support line Pro Long (Physical): - ICE warehouse stocks new lows - spreads tightening ever so slightly Contra (Chart): - still in middle to upper end of trend channel - room to go in terms of lower Bollinger band - long term trend still down - risk/reward for long position not there IMHO I start looking into selling put spreads out in August or September. For example the U16 110/100 p spread. Due to the negative put skew, 1x2s also work great IMHO (selling the one buying the 2s are also an interesting idea).
K
by mjhillpp
Note quite yet, KC longCoffee nearing the orange support line around 122 (2nd month continuation, about 119-120 front month ). Interesting fact about this correction lower from 134 to 122 is that this is the first time in a couple years that we actually have an up-sloping support line (orange line). If the orange support holds this could mark a longer term trend reversal. On the downside further targets remain the lower Bbands as well as the previous lows around 113. IMHO selling put spreads out in Sep16 might be a good risk reward once we reach the orange line (U16 110/100 p spread). The U provides some decent premium over the other contracts as this is the frost scare month.
K
by mjhillpp
RunningAlpha Upgrades Commodity Markets Update to Priority ListRunningAlpha dot com Capital Markets Intelligence High Priority Update for Monday, May 2nd, 2016 Although $39 and $36.50 remains baseline intermediate to long-term support for Light Crude Oil ( in reference to June Contract Pricing ), the recent advance upwards has opened the door for a further short covering rally upwards to $62 to $65, and perhaps $74 to $76 levels if on a spike. Bullish window for buying on dips extends into at least June period -- this also applies to Brent Crude. Russian Stock Market ( $RSX ) looks bullish during this period. Oil and Gas Drilling stocks will likely continue higher on balance -- particularly a core position in stocks like $PBR.A would be sensible, which should also benefit from a continued bullish run in Brazilian Equities ( which I expect Brazilian equities should trend higher into the summer, and again later in the fall to close out the year much higher ). Among many other equities in Latin America, $ARCO and $KOF also have a strong bullish bias with sentiment conviction windows extending into foreseeable future. Other Commodity Markets showing very significant sentiment strength going forward are in the Agricultural complex -- Soybean, particularly Soybean Meal $SOYB, Rice, Corn $CORN, Cotton $BAL and Coffee ( $JO is ETF -- when above $18.02 and especially when trading above above $19.00, then $27 is interim target ), and even wheat to some degree. Equities that would benefit from a rise in these commodity markets should have a tail-wind. Silver and Gold stocks, which RunningAlpha.com has been bullish on for a few months now, still shows signs of strength on pullbacks. Sourced from premium sentiment conviction list on RunningAlpha dot com
NYMEX:CL1!Long
by runningalpha
KCH2016, Coffee futures long position opportunityCoffee futures generally show a clear pattern of systematic ups followed by similar downs. Recently, market has been bearish with structural lows below 120.00, 115.00 and 112.00. Structural low below 112.00 has been followed by a higher support at 112.00. If the market breaks it's first resistence point at 115.90, which is highly likely, then coffee is expected to enter a bullish trend up to 120.00 or even 124.20. Strength and Oscillator indicators show a reassurance for this upward trend. Stoch RSI, RSI and CCI are all indicating an increase leaving over-sold market towards over-bought. My advice: buy.
K
by DzhuneytYusein