Coffee Traders' Forum - A Discussion about Coffee Futures Trading
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Latest COT report.
Reporting period : 5/2/18 through 5/8/2018.
Trading range : 12595-11935 (traded down).
Settlement : 11960 (+5.20).
Total OI change : -10,648 !
So the brief rally came to an abrupt end , which is captured in this report. The high made on the first day of the period, 12595, a day that began to flash warning signs. Despite sliding the balance of the period, we see that fund shorts continued to short cover. The systems we often talk about were in BUY mode (short-cover) until they get the reversal sign, which likely did not come until the final day of the period . The highest settlement was 12480, so 5 cents below gives us 11980 as the potential reversal point. No surprise, the managed new managed money longs we saw as the market was rising, were quick to bail as the momentum to the upside disappeared. Keep in mind, and this is something Tango has touched on with his OI reports, we see a good amount of spread activity. We also see the options delta of both longs and shorts was active as a result of the move up and down through 3 key strikes.
Commercial side is a tougher read. The stand out is the reduction of the gross commercial long. Again, between options, EFP's and spreads, for this group (to me ) it is harder to make any bold comments.
So where do we go next?? Today we had a very tight (.85 tic) range with very uninspiring action. My thoughts by the close was that this could be ready to try north of 1.20 again come Monday. Following this COT report, I am again on the fence. I would think a break of todays very narrow inside day in either direction will set the tone. Also note, we have 3 basically identical trading ranges over the last 3 days. With nothing fundamentally or macro really grabbing headlines, this market remains trapped in very familiar grounds. For me, the reaction beyond the recent 3 day range of 1.50 cents ( 11985 H, 11835 L) will determine where we go next. Too soon for cold weather shocks, so for now, let's focus on the short term techs. Really not much else to add.