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.