Monday, July 23, 2012

Commitment of Traders Report to Cap Coffee's Rally

Commercial Traders Nail 20% Rally. Anxious to Take Profits.

Classic Commercial trading pattern mimics the rise and fall normal market behavior.


July 23, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.

We published a buy recommendation in the coffee futures market on June 22. We suggested that based on the movement we saw in the Commitment of Traders Report as well as the discrepancy between JO, a coffee ETF versus the coffee futures, that the coffee futures market had become oversold and commercial traders were building a base to force short covering in the futures market.
The coffee futures market has rallied 20% since then and commercial buyers from one month ago have turned sellers. Commercial sellers have pared their position by 23% in the last three weeks. The heavy selling has turned momentum negative while Thursday and Friday’s action created a reversal and sell signal from overbought levels. We will be selling September coffee futures and placing a protective stop above Friday’s high of  190.85.
Commitment of Traders shows reversal in Commercial positions.

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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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