Just be long ....

...and wrong is what the last post should have said.  It's been ages since the last one.  Mainly because my short term bull argument ended and we entered this sideways pattern.  But, since I think we are now about to break out of it, might as well document that view.

Who is more short? The Euro shorts or the Coffee shorts?  Obviously the Euro shorts, but that will be the catalyst for driving out the coffee shorts.

Will follow up after today's OI, but basically I think the whole pattern off of the 308 high is an ABC correction.  Always felt that, but thought that August's rally had marked Aug's lows as the end of the c C wave.  Was wrong.  But now, think this last low - and key reversal - has marked the end of C. How did this go down?  Ending Diagonal for the C wave. A series of ABC waves (5 in total):  ABC up, ABC down...etc. All of this well contained within the downtrend channel.  As the last ABC down indicates it, the length of A = the length of C; as has in nearly this whole ending pattern.  Could it make when last dash below the 210? Maybe, but I would look to test this as a bottom.

Just be long..

Have not had a chance to keep up on this and still dont.  So, I still think this mkt takes out the high and actually have a new target at 3.38.

Previous rec was "buy blindly into 241".  Maybe shouldn't have used the "blindly" but it did rally into 272, but then fell sharply into 232.

But the overall trend is still up and the weekly chart bounced nicely of the 52 week MA (as it always does).

So...be long.

Note to self: wait for the mkt to fall 24 cents before making bullish prediction.

..or at least wait 1 or two days.  Litterally, the next day, the makt failed to take out the down trend and MovAve mentioned in the point and figure charts and then began it's plummet (for lack of something more pejorative).  The early warning signs at 265 and 261, would have helped, but probably the catalyst was Euro's big drop the very next day. 

So, does this mean that the second hypothesis of 240/220 is likely?  Probably, but I can still make a loose argument that the Expanded Flat had not completed it's five wave move down at 254 and is only doing so now. If so, a good target would be the 242 area.  With 4 straight down days and today's arguably down, we need a correction.  So, if it does get to 242 tomorrow, buy it blindly. Or, be patient and wait for confirmation of the resumption of the trend. 

Funds should be nearly 5 to 8 k net short as per COT report. 
Daily bullish doji harami today
Blaring H&S pattern targeting 2.00.
Baring any Europe catastrophe, I think equities will resume uptrend too.



60 Min - would like to buy into the red rectangle.

Point and figure - downside targets being confirmed with a very aggressive target at 212. 

d

Been a while, but not much has changed my opinion...except...

The last two posts (april/may) were looking for coffee to top out at 299 and return to 270 or 240.  Bold, yes, but that was what I thought.  The fact that it got above 3.00 made me doubt for a few days, but I needed consecutive closes above 3.00 to change my mind and we did not get them.  Now....

I am still looking for 3.20 / 4.00 in the next 12 months but, after going through the 2.70 target, I am less convinced it needs to correct to the 240 area first.  The correction from the 3.00 had two possibilities:
1) Expanded flat - this idea places the third wave top at the first 297 target and everything since that has been part of the correction, which ended at the end of the 5 wave fall from 308 to 254. This my preferred view, as long as the market stays above 254.
2) Zig-Zag correction - the other possibility places the third wave top at 308 and that this last 5 wave down is part of an ABC correction that goes to 240/220. This recent consolidation might just be the B wave of this correction. Not impossible, but not my opinion now.

If this current move starts getting impulsive, then I think the first hypothesis will be confirmed.  Impulsive should be a big move up that is sustained.

* bollinger bands have contracted substantially suggesting an impending breakout.
* daily stochastic has signaled a buy
* daily candles offer nothing
* BMF/NY Arbitrage strengthening - suggest market has to go up, especially considering that there will be more fine cup this year and yet the diffs are getting more expensive.
* Reverse H&S pattern seen clearly on the  60 minute chart
* Point and figure looking like a breakout.
* Open interest - last six months the correlations have been weaker, but none the less, it seems to be setting up for a rally. 
-- early invalidation can be had at 265/261

...oh, and I almost forgot, SOMAR is placing this year's frost risk the highest in 10 years. As I sit, freezing in Santos, I buy it.

First - fundamental side.  Not too useful in the short-term, but part of why I have the mkt at 4.00 eventually.

S&D - basically, if everything goes well (a Brazil crop of 59 mil in 12/13, for example), the situation will remain tight.  If something goes, wrong, well....

Weekly - thought we'd try for those boxes, but am less convinced now. Volume picking up, but OI dropping. 

Point and Figure- pattern is similar to sugar's recent reversal up.  As each of these MovAve get taken out, the new upswing should be confirmed.  Only good target for now is 307.  But too far away to bank on in the short term. Pattern is a catapult.

60 Min - reverse H&S.  Big H&S too.  But these obvious H&S seem to be a trap.  Id suspect at least 280 regardless of trend.

Funds- too much liquidation for a bull market.  Net short option position.

Merchant position - quite a bit of options protecting the upside, but the further this rises, the more bullish it gets.

May 1st - Really funds, you couldn't get a 3.00 close on a zero volume Friday w/settlment at 299.85?

Not sure what to say about a 299.85 Friday settlement.  Last two weeks have been the two weekest volume months since Dec.  Frost season coming, so I may not get the correction I was looking for, but Ill still hold out for my consecutive closes above 3.00 as confirmation the trend has resumed.  Open interest seems more bullish than bearish, but nothing standout.  Roaster position interesting in that still relatively low futures but high option component (roaster position probably has some 100 % long trade houses, therefor their OI position moving into the "roaster side").

Point and figure - so far, PF has been the most reliable chart tool.  None of the downside targets are being met and nearly all of the upside targets are being met: confirmation of the strength of the overall trend.  Targeting up to 334 now.

60 min - pattern less clear, but of the two possibilities, still seems to point down in the short-term.  If it does continue up from here, it will like a 5 wave move off of 255 and therefore, likely beginning of wave 5 of 5 and the big rally I was hoping for later on.  I am about 60 % sure on that; ie, not very. More of a wait and see approach now.

Weekly - took out the bearish shooting star candle, but still trapped in upper channel line.

Real - bouncing off 2008 low.

Roaster - roaster position interesting.  relatively low OI, but very high option component. At the least, its supportive over then next 6 months.

Funds - fund position turn up again. Relatively low option component going in to frost season. Might be indictive of a willingness to play the long side with futures....and thus, probably a lot of volatility going forward.

April 25th - 299 Target met

299 target met and a little more.  As illustrated in the 60 minute chart, I still favor this as a large ABC correction.  In this case, it would be a big, irregular flat or possible running flat.  If it's an irregular flat, we should correct back to ard 244.  If it's a running flat, mabye only to 270 area.  I prefer the 244 area.  However, the other alternative is that the first move from 297 to 255 was the correction and this last move up is part of a new and powerful uptrend.  For the latter to be true, I would need several days closing above 300.  The last few weeks have traced the technical script really well, so I am going to continue to believe what the graphs are telling me; and they are saying it goes down from here.   Stop on this would be any close above 300.   If you don't believe it, but are short, a close intraday stop would 295.85.

Ill follow up tomorrow with open interest.  

60 Min - illustrating the above possibilities.  This last wave was pretty impulsive, but no follow through above 3.00, does suggest some weakness.

Real - when i first got to Brazil a year ago, I told everyone we would be testing the 2008 dollar low (Real at 1.5650) and no one believed me.  Now everyone is saying 1.45.  Technically, this looks like an ending diagonal.  It does not mean that it cannot gasp down, as it is doing, I think it's possible that the 1.56 will hold. Watch this over the next few days.  A break below 15650 will open up a big area and will be bullish coffee. If not, it will favor my correction.

April 14th

No longer updating every Sunday; only when my opinion changes or targets are met.  And they were met today.  So, is that constructive with more upside or do we retrace.  I am still thinking the larger move off of 297 is still part of a correction that implies a new high eventually.  The new up move off of 255 is a correction of a correction ! Not exactly clear yet, however market has traded nicely in technical terms with today's high hitting near the 78 % retracement of 297/255. This second leg up, launched from a bull flag with base at 270, is projecting up to 299.  I also have some other point and figure targets at the same level.  So, I would continue to err on the long side with your first stop ard 281.60. Or more agressively, 279.50 /277.90.

60 Min - also, depending on how you draw this, you could make the last few months a bullish wedge pattern.  Seems the first leg down was a a 5 wave diagonal pattern which makes me think we test lower in the medium term.  Can we take out 300, test lower and then resume the trend? I think so.

Weekly - held nicely the trend line with volume increasing substantially. Bearish candles still in play.  Again, this looks like a third wave of the final 5th.

Point and figure - pointing to 299.

Open interest - fund future only position showed liquidation, however, quite a bit of options (yellow bars) recently, adding to long position.  (mkt has increased nearly 20 cents since report (tuesday mkt).