Wednesday, June 20, 2012

Covering Coffee Futures Short Positions

Commercial Traders Holding Long Coffee Positions

Small Speculators and Funds Covering Short Positions

The coffee market has been one of the weakest markets of 2012 with prices declining more than 25%. Commercial traders were heavy buyers on the market’s decline to the 180-190 area where the market consolidated for months until May’s decline hit all market sectors.
Commercial traders have held fast to their position with very little net change since the middle of March. It appears that they may be getting the bounce they’ve been waiting for.
I expect this is primarily a large speculator and fund driven short covering rally given the magnitude and the timing as the July contract expires. Never the less, it’s perfectly conceivable that we trade back to the bottom side of the resistance between 170-180. Our protective sell stops will be placed at the swing low of 150.10
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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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