Coffee crashes after short sellers and hedgers re-enter the market

Breakfast Report Research Posts

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A deep dive into the technical and Proprietary Levels in Coffee, Cocoa,  Sugar, and Cotton.

Cocoa

Technicals (March)

50 DMA = 3991

200 DMA = 3383

Trend Reversal Point = 4170

Cocoa futures flipped to a bullish trend on October 17 at 3669. Only a close below 4170 will return the market to a neutral trend. The market has been relentless to the bears; it would be wise to wait for a clear signal or weigh in proper risk management if you are counter-trend trading in this market. If you will counter-trend trade this market, consider outright put options or spread spreads for exposure. 

Bias: Bullish/Neutral

Previous Session Bias: Bullish/Neutral

Resistance: 4250-4300***

Pivot: 4170

Support: 3991

Coffee

Technicals (March)

50 DMA = 171.46

200 DMA = 168.51

Trend Reversal Point = 185.16

With the “Golden Cross” upon us, Coffee futures flipped to a Bullish Trend on October 19. Only a close below 185.16 returns the market to a Neutral trend. Traders can see the breakout of the daily pennant formation for confirmation that this bull market remains healthy. Yesterday’s breakout to 200.00 was met aggressively by hedgers and short sellers. Keep an eye on 185.16 and 180.00 as your risk management levels. 

Bias: Bullish/Neutral

Previous Session Bias: Bullish/Neutral

Resistance: 200.00***

Pivot: 185.16**

Support: 180.00***

Sugar

Technicals (March)

50 DMA = 26.02

200 DMA = 24.71

Bear trade trigger = 26.04

Sugar futures slipped back into a bearish trend on November 30 at 26.04 on record Brazilian production. Only a close above 25.09 will shift traders back to a neutral trend. We will have to wait for stochastic to rise from oversold territory for confirmation that a bottom is in place. Watch 22.00 as a close-in pivot point.

Bias: Bearish/ Neutral

Previous Session Bias: Bearish/Neutral

Resistance: 23.00**, 24.71**, 25.09**

Pivot: 22.00

Support: 21.50-21.00** Pocket Support

Cotton

Technicals (March)

50 DMA = 82.02

200 DMA = 82.95

Trend Reversal Point = 81.80

Bear Trade Trigger = 79.10

Cotton futures slipped back into a bearish trend on the close of December 18th but gave a warning sign, with no follow-through on December 19th. Traders will become frustrated with this market as we continue to see sideways Neutral action.  

Bias: Bearish/Neutral

Previous Session Bias: Neutral

Resistance: 82.95**

Pivot: 81.80

Support: 79.43**, 77.50-75.00 Pocket Support

Phillip Streible, Chief Market Strategist

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Futures trading involves a substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians, or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy, and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third-party application. Blue Line Futures employees use only firm-authorized email addresses and phone numbers. If you are contacted by any person and want to confirm your identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

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