Dec 3, 2011

Coffee Update , Dec 3rd 2011. Sowing the seeds for a buying opportunity at lower price levels

Coffee Ny:
Sowing the seeds for a buying opportunity at lower price levels!
Unable to defeat 2.40 very strong resistance!!!:(round number ,old neck line broken support , daily ++weekly falling mov avgs levels with their importance being enhanced by downside crossing of LT ma with ST ma.
Lack of trend indications (ADX) , a long and boring volatile sideways "zig-zag".
A bearish triangle showing up on the maps....
Fibonacci 50 % retracement @ 2,20  starting to show up "tired" signals.....
Fibonacci 61,8% retracement @ 2,00 waiting quietly to be touched...

If fundamentals can´t make you feel confortable in going short around 2,00 level.
Take the opportunity to go long , start when volatility abbates and  daily volume increase . Add to longs inversely to new fund shorts!!!

Oct 31, 2011

Brazil Bovespa Update , Oct 31 2011

 Struggling to go higher in response to external temporary optimism.

But sooner than later, Ibovespa listed companies with a big dependency on China purchases (Iron Ore, Soybeans and poultry meat,) will weight on the index upside potential. Oil prices staying steady around recent levels will also weight on Petrobras upside potential. Dollar / Real rate, looking also steady after leaving behind seemly historical lows should also feed future inflation, making banks performances less profitable than last couple of years, with their risk exposure more questionable.

65.000 should become a tough barrier to be broken.


Oct 25, 2011

Coffee Update: October 25, 2011

Coffee Update: October 25, 2011

Coffee futures prices have been behaving without any technical unexpected surprises last couple of trading days!

The upside gap @ (KCZ1) 2.5100/2.5135 was closed today but not yet convincingly left behind , with the daily closing @ 2.5115.

Recent upside move is challenging and almost defeating short term important resistances.

Although this move has been made with lower than average daily volume, increasing open interest has been supporting recent up move. Technical biased buyers still look to have more upside price pushing power, at least in keep trying to push prices up to 2.60/2.65.

Medium term direction still is undecided , any bets should be made on a short term basis with tight stops!

Oct 20, 2011

Power Track Futures: Coffee Update: October 20, 2011

Power Track Futures: Coffee Update: October 20, 2011: Coffee Update: October 20, 2011 Elliott waves counting are becoming clearer, showing at each new chart bar , that we may just be in...

Coffee Update: October 20, 2011

Coffee Update: October 20, 2011

Elliott waves counting are becoming clearer, showing at each new chart bar , that we may just be in a “slow , wide and complex” bull market corrective wave 4.
As long as the 2.00 level is respected on a weekly closing basis , this scenario can still be considered as a strong possibility.

Daily/Weekly/Monthly : So far the market has performed accordingly to a “Zig-Zag” (5-3-5) bear correction of the last Bull Run, the only doubt right now is :
a) if the “B” wave of the correction has been completed at 2.9085(KCZ1) and the correction has ended with the 2.1980 low , completing the “C” wave .

b) or if we can still test the resistance line of the down trend channel around 2.60 before a new downside leg completes the correction with one more leg down to test the 2.1980 low or even the 2.00 support ,completing wave C)

On the pure technical/graphical side, if the market is able to post a weekly close over 239.55 this Friday , the odds will favor a quick challenge of last recent resistances at 2.4050/2.4225 (last year´s close and high) , then if the gap at 2.5100/2.5135 is closed and convincingly left behind , the odds will favor the bet on the end of the downside correction at the 2.1980 (KCZ1) low.

Oct 9, 2011

Coffee Update-(All mkts in stand-by mode.Decreased volatility (VIX) confirms this!)

Correct assessements of fundamental data changes will make the diference in the achievement of success in positions on medium term .

For coffee ,watch the rainfall patterns ,it must continue within average seasonality,from now on, first two weeks of october are a turning point to coffee belt spring rainfall patterns , at least historical average october rainfall are needed this year to support and grow the good recent flowerings which points to a record "on year" coffee crop in 2012-2013.
Before the spring flowerings "beans promises" does not become "coffee tree assured buds", more or less, at the end of this year , coffee prices should respect technical supports untill there!

Daily: 2.20 level should hold this week.Last week rally has happened on increasing open interest (+- 3.000 lots) and low volume , which shows that new sellers were not there anymore , friday´s plunge has happened on low volume and appears to be: "weak hands" pre-weekend liquidation.

Weekly: After testing the 50% Fibo retracement of the 1.30/3.10 rally at 2.20 ,the neckline resistance around 2.36 was challenged and not broken, creating an weekly indecision candlestick on the charts.
Open interest shows that close to 14.000 lots were added as new shorts during the 2.90/2.20 plunge , last week mkt data has shown that new shorts selling potential seens to be exausted.

Botton Line: Weekly charts are still bearish ,but ma´s channel support was touched and many technical divergences are showing up on daily charts. With the help of seasonality:(Brazil crop selling end rally)+ temporary weather uncertainties,few agressive new buyers could be able to oblige indulgent greed shorts to liquidate their short positions.Despite last friday wild plunge , new agressive longs could easily return to the mkt this week , if they succeed in pushing prices above 2.36 , the next upside objective will be the test of the open upside gap at 2.5100/2.5135.
Risk-reward odds favors bullish biased short strangles.(i.e. sell close to the money nearby puts and sell further out of the money nearby calls) (ex: sell kcz11 2.00 puts + kcz11 2.50 calls for a total premium of 500 points).
Good trades.

Veteran Traders Share Some Wisdom by Jim Wyckoff

Veteran Traders Share Some Wisdom
(NOTE: I write this story many years ago, but it still hold its value today.)

An elite group of traders and technical analysts gathered in Las Vegas last weekend to educate and enlighten several hundred attendees of the 21st annual TAG (Technical Analysis Group) conference. For two and one-half days, these respected market watchers shared their trading secrets and strategies.

Following are some trading and technical tidbits this writer picked up from this year's TAG 21 conference, which was put together by Tim Slater, a respected technician in his own right, and was sponsored by

* One of the themes coming out of this year's conference was the increased volatility in the stock market, and how traders with a futures-related trading background have used their experience with volatility to obtain better entry and exit points in stock trading. Most agreed that whether one trades stocks, or financial futures, or commodity futures, there are key trading techniques and tenets that apply to all three.

* All the speakers heard by this writer pointed out that successful traders must have a specific trading plan before they execute a trade--and show keen discipline in following through on the plan. This includes entry points and potential exit strategies--including setting stops. Always set a stop when trading.

* Keep a diary when trading. This helps identify any trading mistakes, or trading successes, in future decision-making on trades.

* Have a money-management plan. This is a must. Know what your financial risk tolerance is and trade accordingly.

* Don't add to a losing position.

* If you are in a trading slump, take a break for a few days or weeks, in order to reflect upon your trading methodology.

* Do not overtrade. This is a common mistake among many traders.

* Take advantage of market trends. "The trend is your friend" saying rings true. Use extra caution when trading against the prevailing trend of the market. Don't try to pick tops or bottoms.

* Let your profits run and cut your losses quickly.

* The fundamentals in any given market are always most bullish at market tops and most bearish at market bottoms.
This is where the "buy the rumor, sell the fact" anecdote sometimes comes into play.

* There is no Holy Grail in trading. There is no "free lunch." Trading successfully is hard work.

* Most speakers said their methodologies should be used as one "tool" amid a variety of tools in your own trading "toolbox."

Jim Wyckoff

Sep 23, 2011

Us$ Dollar Index update: "The trend wants you as her friend" !! Keep going with her!

Stay with the uptrend : If we pass 81.00 , next objective is 89.00!

Coffee update Sept 23rd 2011, Moisture comes gradually .Frost risk vanishes suddenly!! Can this be named "volatility"?

As expected the (Head & Shoulders) graphical pattern was formed!
The odds to confirm that were helped by premature, misinformed weather speculators, associated with naïf expectations about easy money. Fear has avenged the greedy. Now time has come to help rational traders.
Don’t buy against the down trend, neither sell at weekly support! Stay out for now !!!
Sell rallies close to the bearish gap @ 251 and buy dips (with a tight stop) close to 235 (KCZ1) for short term.
So far the easiest direction to this mkt is down!!!! But rains haven´t come yet , but they should be coming !
If weather patterns does not fool us , the path of least support points towards a test of 175 objective!!
Strong Us dollar and a fair (off year crop harvest in Brazil) will help this , and give investors a good long term buying point!!!

Sep 12, 2011

US $ dollar index 09/12/2011.Are we starting a long term upside reversal??

Where can you invest your assets nowadays??

1-)If you want to put it in the most stable (in US dollar terms) , supposedly solid , fundamentally reliable , although valued with a political bias , you should first of all , discover where to find the willingly, liquid and “reliable” sellers to sell what you want to buy , also defy their mood and intentions to sell it to you. Despite possibly being this task an impossible intention ,because totalitarian states don’t allow ,nor encourage competitors to threaten their politically controlled central banks intentions and goals that allow them to define the nominal quotations of their national currency.
So don’t loose your energy and talent in trying to build big long positions in Chinese Yuan currency.

2-)If Swiss bankers are not anymore concerned in guaranteeing your financial assets property ,and are becoming each day more pressured to cooperate with the effort of the Swiss central  bank to defend the overvaluation of their currency and are unashamed in charging negative interest rates in an over valuated currency .
So, don’t loose your dignity and good mood in buying expensive Swiss Francs to store in a Swiss Bank safe box.

3)-If you had a chance to have , at least, high school education and you have attended the essential math class , you will not fell comfortable in putting your "nest eggs" in a country currency with a national sovereign debt somewhere around 200% of its GDP.
So, only invest in yens if you want to visit your banker in Japan to mourn the last Tsunami victims, may be you can get an earthquake experience as a bonus!

4-)If you are a good money manager , you should be loaded with commodities exporting dependent "emerging countries" currencies , all over valuated !
So , follow your text books and don’t add risk to a winning , although each day more risky  position.

5-)If you like the color and the shinning of gold but feel uncomfortable for having lost  the last ,long and wild, uptrend , still keep admiring the shine of the metal , but don’t buy a heavy gold collar neither a container of gold bars at the recent prices , simply because gold prices are priced in US dollars and when dollar currency is
threatened , although not yet discredited , as a  global exchange reference for commercial trades , the nominal price of gold go inversely up. And last but not least , remember that "strong currencies reserves” means GOLD in USA central bank. Remember the word "Fort Knox" ???? 9.000 MT of gold are stored there just for fun ......worth at current gold prices 1/4 to 1/3 of  USA sovereign debt and roughly a bit less than the sum of all European countries gold reserves , 10 times China reserves , 8 times Russian reserves.
So, from now on , buy diamonds instead of gold to your wife /girlfriend.

6-)If you don’t want to help anticipate the real state asset bubble burst in strong currency , commodities exporting dependent emerging markets , you will not invest in a real state property just to have a distant Holliday vacation house , airline tickets are cheap and luxury hotels are kind off priced in London values, temporarily , because of local currency overvaluations.
So, don’t invest in a future headache possibility.

BOTTON LINE : The long , aged and unquestionable US dollar bear market seen to have reached its final and definitive bottom!


After important support being tested , strong upside reversal . Ma´s much easier to be broken this time!

 After a strong upside reversal , resistances are ahead , but the strong ones are already behind!

Stocks are very cheap historicaly , in relation  to gold prices. This is not sustainable for much more time , since the world economy depends on the health of American economy!

 Seens very though task for Gold be more valuable when priced in Crude oil prices!
 The best and more consistent trend in last 30 years , the nest of the crises! Now supported by Uncle Sam . If and when it bursts , the US dollar will jump the bumps wildely.
 VIX are nervous , but still under control , no risk avertion situations in near sight.

Sep 10, 2011

Coffee update Sept 10th 2011- Technical resistance action or expected moisture faith!

 Frost happens in one morning , drought happens in one season!  Coffee futures prices have technicaly reacted this week exactly as we expected according to text books lessons! Ancient strong supports , now strong resistances around 2.85/2.90 (now in KCZ1) were sufficient nought to stop and so far revert the , corrective , althought wild and fast upside  move. We are talking here about a 60 cts move in 3 weeks with a 25 cts move on the opposite side in half a week.(translated in $$ , that means an up move worth U$ 24,000 per contract with a U$ 10,000 corrective move in 3 days , less than 3 weeks latter.
   At least for unprepared coffee traders  who still think that hedge is a magical and divine word , hell could has been saw as a possible reality this year.
   At the end of this week , the market has clearly shown to the fools that much more expectation changes of future S&D  will be needed to break the 3.00 barrier. Only a drought could do this , but it still is possible.
  Till there (first week of october) , without a seasonal normalization of rain patterns , TECHNICALS will
rule price moves , as it has happened this week.
  Bears , if any , shouldnt be too excited about this wild downside move , since the 2.65 support is very strong and will do its best to support the prices.
  I would bet on a sideways trading range (2.65/2.75) for now .
  But just have in the back of your mind : If just the annoucement of a few moistured clouds have imposed such  a pain to the Bulls .....what could be prepared for them , when and if the very light first rains arrive as seasonally scheduled?????????????????

      For now just be TECHNICAL!!!!!

Sep 3, 2011

Coffee Update Sept 3rd 2011-After a cold winter , a possible dry spring?

September 3rd 2011,
After a complex downside correction , when coffee prices tested their forecasted technical and (why not fundamental) supports around 2.25 (1rst month kcu11) , as expected , coffee prices have shown its strongest possible reaction to the opposite site . The strenght of the upside move from 2.3530 to 2.9085 (kcz11) without any stop to breath , can only be explained by a mix of technical liquidation of short positions with agressive new speculative longs , possibly based on weather bets.
The usual deadline for rains to show up before we say that we are in a drought situation  is the end of the first week of october. Untill there if rains show up at any moment , the spring flowering of the coffee trees could be surprisely strong .
CONCLUSION: As usual the mkt has given the fools its hidden surprises!
2.25 and 2.85 still is the "traders" "trading range" of this market!

Technicaly : We may be just forming a misleading bull trap in the form of a bearish head&shoulder ,
looking at the trend indicators and oscilators on the monthly charts (the only timely bars that we can look in the actual mkt situation ) , the mkt still is in a directional bull trend (ADX) , but to many divergences are showing up and i would prefer to bet on the strenght of the resistances being tested now , and not on the possibility of a new high.
From an Elliott wave perspective , we may just be forming a complex "Double Zig-Zag" correction of the recent bull market.
The KCZ11 August high @ 288.50 is very important to be respected on a closing basis , to allow new mkt highs. So far the first weekly close of KCZ11 in September  was not able to sustain this level , closing @ 288.05

Fundamentaly:The weather patterns in general and also in the brazilian coffee regions , have been
so far unfriendly to coffee trees this year . If we dont have a good flowering , wich should occur soon and a very normal pattern of rains starting at the end of this month ; just tighten your seat belts and forget any technical or logical analisys of future coffee prices.

pls read SHOULDER

Jul 27, 2011

Coffee Update July 27th 2011- Cold fronts didn´t threaten coffee belt so far , noone in sight neither.

 Coffee Update July 27th 2011- Cold fronts didn´t threaten the coffee belt so far , noone in sight neither.
Comments: Without any weather treath , the path of least resistance is downwards.All technical indicators support this move down.A close under 2.38 (KCU1) will confirm the weakness , indicating a test of 2.25 +-.

Jul 14, 2011

Coffee update july 14th -2011 Seemly bearish , but bears could be obliged to hibernate for a while

Daily: 2011 July 14th
After holding the fibo 38,2 retracement support , the recent price movement start to look more like a part
of a complex , and may be long  3 waves ABC correction . The test of 285 resistance still very possible to complete B wave .Without any weather event after a possible test of 285 , next move should be straight down to 240 /220 to complete the C wave.

: 2011 June 29th
After the short term support being confirmed by a hammer candle followed by a strong upside reversal ,
next upside target should be close to 275/285 (previous supports and not yet tested resistances).

Jul 7, 2011

Coffee Update July 7th 2011- Frost probability should become higher for next years!

Coffee prices may be overvalued when looked  from a purely fundamental point of view, this is what futures prices are supposed to anticipate . Perhaps this year unusual freezing winter in brazilian southern regions  has helped this bullish overshooting . If i had to speculate on any frost probability for next years , i would take the long side , simply because i believe on the major influence of the solar cycles on winter intensity in intertropical zones. That cycle has reached its peak a couple of years ago and has since then turned down .
So far we have been right both on the way down as well on the way back up.
In the actual scenario of greed and fear , volatility will stay  strong in the same way that resistances and supports will be weak.
The odds , the seasonality and the facts still favor a test of , at least (kcu1) 275 resistance , if not 285, before next leg down !
But i still dont see any evidence that the previous uptrend line has not been broken for real .
Without any weather surprise , i will still see the prices testing the 225 support at the end of winter in Brazil or if you prefer at the end of the harvest.

Jun 29, 2011

Coffee Update June 29th 2011 - Undecided but scared!

2011 June 29th
Daily :The new KCU1 quartely low @ 241.45 has hit our profit taking target .The following upside
reversal was strong enought to break all weak upside resistances , meaning an upside move , at least
untill 275.

Weekly: 2011 June 29th
After the short term support being confirmed by a hammer candle followed by a strong upside reversal ,
next upside target should be close to 275/285 (previous supports and not yet tested resistances).


Monthly: Technicians should´nt be fooled by winter/frost scares , but should rather stay out for now

Bottom Line:
Play volatility skews on call options if you want to play .....

Trade idea: Buy out off the money nearby call spreads and sell long term very out off the money puts (1 long spread to 2 short puts).

Jun 15, 2011

Coffee Update June 15th 2011 - Bearish mood!

2011 June 15th
Daily :The new low @ 253.30 after breaking the uptrend line support around 275 could mean that the recent strength is only a short term upside / pull back correction , this upside move should be contained under 285/290 before coffee futures prices resumes its medium term downside correction.

Weekly: A break of 275 will allow a quick pull to 285/290 ; on the other side a failure to hold the 255 support will mean a quick test of 240.

Monthly: Without any weather (frost) scare in this current Brazilian winter season prices  should test the downside support @ 225+- , where fundamentals (S/D) will define next price move.

Bottom Line: Odds favor the downside, with a bearish flag being formed in conjunction with a pull back at the old broken support uptrend line and mov avg resistance.
MACD has room to the downside.
ADX is showing a weakened, if not exhausted uptrend.
RSI is giving temporally support @ 50 (helping to form the recent bearish flag).
SLOW STOCH is negative but not yet oversold.

Trade idea: Sell between 275 and 290 and buy 310 aug calls (1 to1 ) if any frost scare , add to shorts on downside break of 255 and buy back close to 240.

Mar 14, 2011

Fibonacci e Pitágoras

O quadrado de qquer numero numa sequência Fibonacci é igual ao quadrado do seu número anterior mais o quadrado  do seu posterior dividido pelo seu antes-anterior , isso é o mesmo que o teorema de Pitágoras para o triângulo retângulo! É a beleza da álgebra encontrando a geometria !
O início da sequência Fibonacci ( 0,1,1,2) nos mostra então , que a existência dos números racionais está ligada à necessidade de existência do etéreo 0 (ZERO). Como 2 / 0 não existe , a equação : (1^2 )=((1^2)+(2/0)^2) só pode ser resolvida com a descoberta da raiz quadrada de 2 , o primeiro número irracional já que não podería existir um triângulo retângulo sem hipotenusa.