Coffee Traders' Forum - A Discussion about Coffee Futures Trading

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Market *PIC*

Several reasons have been attributed to yesterday’s drop by traders and market reports. Among the sectors responsible were new fund selling, origin selling and end of month selling. It’s very likely that every sector in the COT was active. The main participants have been systems short buyers and commercial and other longs sellers, probably yesterday as well in part, causing negative changes in the OI. I dare to say that yesterday, as the market headed to 133.00, the same actors were at play. As we have seen so many times in the recent past, the longs seem very eager to sell. Yesterday my view is that these longs intensified their selling, hitting big stops causing an avalanche of liquidation. Of course, as stated, all sectors were likely active. With the high of 133.00, a systems reversal target was set at a price of 128.00, in theory, and so systems are likely to come in as sellers at around 8:00. However, as we are seeing lately, this group has not been as dominant as we have seen in the past. This morning the market is quiet and indecisive but mostly steady. The depth of market is equally dense on both sides in March and nothing stands out in the forward months. The arb is 49.66 indicating a relatively steadier London than what we have been seeing but the JanMar is close to flat this morning. The Real has been weak ever since the USDBRL flirted with 3.2000 and stands today at 3.2749 +.0021. The COP closed yesterday at 3016.37 +9.35. Currencies were mixed earlier but have now all strengthened and the £ is the only market down against the $. Bond futures seem to have digested all the interest rate chatter and have been firm today lending strength to metals. Oil is up while equities are sharply lower and softs are unchanged except sugar which is lower.

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