Monday, June 18, 2012

Cocoa Futures Headed Lower

Commercial Traders Selling with Seasonal Tendency

Commitment of Traders Report aligns bearish seasonal pattern with commercial selling.

The cocoa market is exhibiting classic commercial trader behavior. Commercials were buyers in April near the $2050 per ton lows and now that the market has come back to test the $2275-$2350 area, commercial traders have turned sellers. Last week’s Commitment of Traders Report shows that commercial traders sold nearly 5,000 contracts, 12.5% of their total position.

They clearly expect the resistance to hold and the market to exhibit its typical seasonal price decline from July, 1st – expiration of the September contract. We will be selling September Cocoa and placing our protective buy stop above the recent swing high of $2271.

This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

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