I believe that the weekly chart of coffee is showing a start of a downtrend. Entering a trade here would mean placing a stop above 220, and that is way too much risk. The daily chart looks bearish too, but again, the risk reward is unfavorable. There is a bit more room to the upside, but I believe this chart will eventually break.
The histogram is still rising, and the divergence isn't confirmed yet, but it will be confirmed pretty soon. MACD lines also are in a bearish divergence. The Force index shows another nasty bearish divergence. Now look at the hole screen. On the left side, we have an uptrend. Look at the Weis Wave, it is mostly green with big surges of volume. Mid October bearish volume became bigger, flashing the warning light. Look how after that, bearish volume starts getting bigger and bigger. A downtrend started, with heavy waves of selling. At the beginning of 2014, the first warning signal came, with two consecutive high waves of bullish volume. In February, volume surged. In April, volume diminished but that's not a signal on its own, it is normal for volume to diminish, but look what came in May. That is a bearish change in behavior, and it is likely to see the downtrend from 2011 continue. Right now, I think we are in the last rally, retesting the 200 level. Expect lower prices.
The histogram is still rising, and the divergence isn't confirmed yet, but it will be confirmed pretty soon. MACD lines also are in a bearish divergence. The Force index shows another nasty bearish divergence. Now look at the hole screen. On the left side, we have an uptrend. Look at the Weis Wave, it is mostly green with big surges of volume. Mid October bearish volume became bigger, flashing the warning light. Look how after that, bearish volume starts getting bigger and bigger. A downtrend started, with heavy waves of selling. At the beginning of 2014, the first warning signal came, with two consecutive high waves of bullish volume. In February, volume surged. In April, volume diminished but that's not a signal on its own, it is normal for volume to diminish, but look what came in May. That is a bearish change in behavior, and it is likely to see the downtrend from 2011 continue. Right now, I think we are in the last rally, retesting the 200 level. Expect lower prices.
