Coffee Traders' Forum - A Discussion about Coffee Futures Trading

Coffee Traders Discussion Forum

Coffee Traders' Forum

Market *PIC*

The selling at the opening encountered good buying. Additional selling later in the morning pushed the market to its lows but it quickly recovered. The market may be straddling the 125.00 strike, as Feb options expire on Friday, but it seems to have regained its steady tone. Yesterday the market stopped dropping right above the 122.50 strike but, more significantly, at Nagual’s then current 5 hour support area. As we see in the COT, there are several 3rd parties, as opposed to commercial longs and systems, that enter the market unannounced. It seems that yesterday one of the spec groups became a vigorous buyer. It is difficult to ascertain at what level the systems will reverse to buying. There are two theories, one of which is that the reverse trigger is 5 cents from the high/low point or 5 cents from the high/low settlement. The first would call for a trigger of 127.50 to 128.00 and the second theory would choose 130.00 to 130.50. However, the systems are often not in control of the market and are bullied by other sectors as we saw yesterday and as we repeatedly see on the upside. RC is remaining in line at 47.42 and the MarMay has left the negative area and is now trading at 1 premium. KC MarMay is trading at -2.40 but is well bid. USDBRL is 3.2458 -.0030 and the COP closed yesterday at 2910.32 +4.34. DX is down dramatically as all the major currencies are up against the $. As a result, and in spite of the weakening bond futures, metals are flying, except for palladium which is already quite elevated. Equities are down sharply and oil is strong and higher, together with its products. Sugar, cotton and cocoa are all higher. It seems that all of the commodity markets are invited to today’s party. Hopefully the falling dollar will attract buying in kc and overpower the systems that are still sellers.