Best Thread COFFEE - The next big bull?

[bgold]

David,
I would agree that opportunity is great but so is the volatility. I always try to trade in multiples of 2 contracts allowing me to take profit on 1/2 position to create a profit cushion for the swing/position trade. Considering KC can gap by 400+ pts, the potential loss is therefore often more than I can stomach both in terms of $'s and especially "psychologically".
May I ask how you would trade KC? Feedback from others also much appreciated?

 

[..]

head and shoulders

Dave

I agree, and stand corrected - one thing about a potential trade at present though is that is the dollar not due for a rally soon?? - will this not put downward pressure on all dollar denominarted commodities? - or does this generally only effect gold/pgm group?

cheers
mark

 

[gene]

I think the market will do MUCH better than 117. I wouldn't go so far as to say the March contract will go to great heights, but I believe the market will at least obey the 50% retracement rule.

 

[DaveT]

Bgold wrote:

May I ask how you would trade KC?

For my position trade stance :

I'm looking at a spread-bet trade with a 1000+ point stop, BASIS MAY 2005 futures.

1st target : 11700-11800
2nd target : 12700
3rd target : 15000

Looking to take initial profits at 1st target of 11700-11800. Reward/risk Ratio 2:1

There's a much greater reward/risk ratio for the higher (longer-term) targets, all of which I believe we will see.

 

[minx]

May I ask how you would trade KC? Feedback from others also much appreciated?

I trade it for a 1-2 day smash and grab. KC and CT do scare me, so volatile.

 

[gene]

I'll bet I can scare the pee out of ya:............... ................. .................. ......... LUMBER!!!!!

 

[minx]

Yup, Lumber and Pork Bellies do indeed scare the crap out of me. The only time I've ever traded lumber for real the trades have immediately gone against me and hit my stop within a few trades. When I paper trade it it always seems to go limit in my favour, typical
Think I might just leave them alone for now..........

 

[DaveT]

May Coffee showing tentative signs of support here (around 9600)

Note (on chart below) that this is a main previous (plateau) high level - and a defintion of a bull trend is that corrections should go not much deeper than the previous highs....


All expectations on course..so far....

 

[gene]

I bought March at 94.50. I guessI did, anyway. I'm still waiting for the fill report.

(edit): Nope. 94.70.

 

[gene]

This dang shur ain't a very scientific way of goin' 'bout things, but maybe there are a couple of areas on the daily and weekly charts that we can call support, now. I don't know, but take a look at that monthly chart. Look what's happened a couple of times when the market spent some time under where it is now!

 

[DaveT]

Gene - I agree with your chart lines :

Previous channel resistance = future trendline support

 

[gene]

Thank you. But there is also an ugly side of the picture. It could use a pull-back.
edit: Hmmm.......This picture really has me thinking.
My finger's on the panic button.
another edit: If it does break down to there, that would be a good thing, too. An opportunity to buy even lower.

 

[gene]

12-15 01:53: Global 05-06 Coffee Production Sn At 106M-108M Bags-ICO
DJ Global 05-06 Coffee Production Sn At 106M-108M Bags-ICO


LONDON (Dow Jones)--The International Coffee Organization put its first
estimate of 2005-06 global coffee production between 106 million and 108
million bags, the ICO said in its November report Wednesday.

For 2003-04, the ICO pegged total production at 100.76 million bags, down on
2002-03 at 121.94 million bags, showing the first slip in production figures in
four years, the report said.

Major producer Vietnam is seen with 11.25 million bags for 2003-04, down
2.64% on the year before, ICO figures show.

Global Consumption for 2003 is seen at 113 million bags, it said.

Global production for 2004-05 is now seen at 114 million bags, equal with
consumption seen for that year, the report said.

For importing countries, stocks of green coffee at ports stood at 21.4
million bags at the end of September 2004. Opening stocks in exporting
countries for 2003-04 was 22.06 million tons but is seen at 19 million bags for
2004-05, the report said.

-By Meghan Sapp, Dow Jones Newswires; (+44-20) 7842-9415;
[email protected]



(END) Dow Jones Newswires

12-15-04 0453ET

DJ info:
N/DJCS,N/DJOS,N/OSAG,N/OSCM,N/OSEN,N/OSFR,N/OSME,N/OSOV,N/OSTR,N/CFE,N/CMD,N/SC

KEYWORDS: FSN42905 ACEFMOT COFFEE FOOD GENERAL
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Hmm? No, I didn't say anything. Did you say anything?

 

[bgold]

1
LONDON (Dow Jones)--The International Coffee Organization put its first
estimate of 2005-06 global coffee production between 106 million and 108
million bags, the ICO said in its November report Wednesday.

For 2003-04, the ICO pegged total production at 100.76 million bags, down on
2002-03 at 121.94 million bags, showing the first slip in production figures in
four years, the report said.

Major producer Vietnam is seen with 11.25 million bags for 2003-04, down
2.64% on the year before, ICO figures show.

Global Consumption for 2003 is seen at 113 million bags, it said.

Global production for 2004-05 is now seen at 114 million bags, equal with
consumption seen for that year, the report said.

Is this bullish or bearish? I am as confused about fundamental news as about studying the chart. Ok, long term there should be another bull run. Sunspots etc. Short term,I wonder why Commercials keep adding to their short positions while large specs/funds are adding to the longs. My money (well figuritively) is still on the insiders.

 

[gene]

They're talking about real tight supplies...possibly a deficit. That is bullish...at least long term.

Somebody correct me if I'm wrong, but in some markets, the commercials are primarily the users; those who buy the product, while in other markets, the commercials are primarily the producers; those who sell the product. If the price is high, the commercials should be short if they are the producers, because they want to sell the product at a high price.

Coffee COT chart:

 

[DaveT]

Bgold, Gene, -

Surely the fundamental picture is an overall bullish one, from here?......

We have :
1) Brazilian Production down for the 2nd of 3 years
2) Vietnam producation under threat from El Nino, etc.
3) Increasing Global Demand.
4) Warehouse stocks being drawn down( by roasters, etc.)
5) Producers/farmers holding onto beans in the hope of higher prices in 2005.
6) Retailers beginning to raise prices, (passing costs on to consumer.)

IMO, the inherent UNCERTAINTY of the 2005/2006 crop, (and possible repeated weather threat) will mean steadily higher prices up to Feb/March 2005, then a pause/range, then incresed volatility and SHARPLY HIGHER PRICES from April-July 2005.

I would be very surprised to see the market go lower, or into a 'dead' range with all the above factors coming into play.

Technically, I compare COFFEE (currently) with the following past emerging bull markets :

1) Wheat in 2002.
2) Soybeans in 2002-2003
3) Sugar in 2004

OFCOURSE, there will be sharp, sudden corrections (sometimes deep), but SURELY these must be bought.

I don't know how long you guys have been watching/trading the commodities markets, but I have only been around since2001/2, and have seen enoigh young bull situations to recognise this COFFEE BULL for what it is.

All IMHO, ofcourse.

 

[gene]

Yes, I definite see it as very bullish, as well, but I have made the mistake of being complacent a few times. I'm looking at all possibilities, though expecting upside movement NOW. I can't absolutely know that will happen until it has.
edit: WOW!! Did you see THAT!!?? (about 14:28 GMT)
edit again: <BOOM> OOOooohhh!!! There's another one!
yet another darn edit: I'm out. Might try to do some scalping, change over to May. I hope I get a good fill, for once.
last edit on this post. I promise: I'm back in May, now. Weeeee! This is fun!

 

[DaveT]

Hopefully Monday 13th December/Tuesday 14th December 2004 will turn out to be an execllent opportunity to get LONG.

It's a BULL MARKET.

A young one, yes, but isn't that the best place to enter?

When everything is confirmed and in the market, the price will be close to topping. That's the way futures markets work. They DISCOUNT the future.

 

[DaveT]

Gene -

You're enjoying this aren't you?

Just keep those emotions in check, and have a clear written strategy.

Then maybe the Coffee Bull will be kind to you.

 

[gene]

Gene - You're enjoying this aren't you?

Yes, I'm going ape over it. / :cheesy: