KCZ2012 - Long Term pespective for traders and investors

ICEUSA:KCZ2012   None
Coffee has reached a price level which will set coffee prices for years to come.

Fundamentally, political unrest will propel the price higher quickly while any increase in the overall economy from this point forward should add to worldwide consumption. Energy price increases should add to these catalysts.

Technically the chart is a make or break, as any failure of the LT long range shown on the chart will prompt an attempt by short sellers to scare the longs out of their positions. All companies that are using this instrument as a hedge, and we can imagine that there are many in the restaurant sector who do so, will be forced to aggressively buy on any sizable increase in price.

LT Longs will be encourage by the apparent confirming spike in volume , but it should be noted that at least some of this is doubtless occasioned by short sellers that are unwinding their positions aggressively after the failed attempt to force a new low. Volume is always a very tricky subject to interpret and is highly subjective to what a person is inclined to believe, in our opinion

The current short will either fail or reach the 1st target identified on the chart. Failure certainly seems more likely at present.

Longs from the LT Swing Long have nothing to worry about at this point and any shorts from the Short Term Short that are still in full positions have needlessly given back most of their profit. Typical day in the market in other words.

Keep in mind that futures are sometimes out of sync with the underlying commodity or index. We prefer coffee etf plays and only use KC as an arbitrage indicator of sorts.

We'll post some charts for coffee etfs as time allows.

Trade the chart and trade safe.

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