Coffee Futures are Brewing - Factor Trading - Peter Brandt

Coffee Futures are Brewing

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Coffee Futures

Coffee Futures are brewing again.  Historically, the Coffee market has been a yo-yo — major Coffee bull markets followed by major bear markets, as shown by the quarterly graph. The market has been trading in an area of historical support.

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The weekly chart has been forming a rounding or complex H&S bottom. The right shoulder has taken the form of a symmetrical triangle.  Coffee continues to form a possible rounding bottom on the weekly graph. This bottom is forming in the area of likely historical support. I believe the advance last Friday was a classic Wyckoff Sign-of- Strength (SOS) day, meaning it could prove to be the launch for the completion of the bottom.

 

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The advance today has completed — at least intraday — the symmetrical triangle on the daily graph (red box).

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Pending a close above 135.30 a major bull trend will commence in Coffee. The most likely profit target is 160, or the area of the 2014 lows.
This is a HIGH RISK trade.
Coffee ETNs include CAFE and JO.
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