I've laid out a plan I'm looking at on one of my favorite commodities - COFFEE ☕😍
What makes it so hard is the predictability of the weather - nearly impossible for the future. However, it is odd to see that the price still bonces at key support and resistance zones, almost like any "stock". Which tells me regular market trading still applies despite the odd weather event.
The reason Coffee has fallen so hard over the past few months is supply - due to extremely favorable weather conditions, coffee supply is more than demand. Resulting, as market dynamics goes, in a drop of price.
It's unfortunate though that my favorite pack of beans at the supermarket has not gone down - weird how that works 🙄 I like a medium roast, Columbia single origin.
It's dropped -33% already, but I can clearly see the market structure entering bearish phase after the bullish phase, peak (the new high) and now likely a multi-month bearish season. The question is just where the price can bottom for such a well loved commodity.
I looked at past cycles, not too long ago we dropped roughly 44% during the bearish cycle, taking 2-3 years to move into accumulation before another impulse wave up. That places a target for entry exactly in the highlighted zone around $250ish.
But I wouldn't get too greedy on my favorite commodity, buying orders can't be too low either. This would likely have to be a multiyear hold. Pepperstone sells coffee on cash contract but I usually do futures. Pity that I didn't get in sooner, bullish cycles is also at least a 2 year journey. I'll sell when the weather is bad 😅
Next up? Chocolate for sure...
What makes it so hard is the predictability of the weather - nearly impossible for the future. However, it is odd to see that the price still bonces at key support and resistance zones, almost like any "stock". Which tells me regular market trading still applies despite the odd weather event.
The reason Coffee has fallen so hard over the past few months is supply - due to extremely favorable weather conditions, coffee supply is more than demand. Resulting, as market dynamics goes, in a drop of price.
It's unfortunate though that my favorite pack of beans at the supermarket has not gone down - weird how that works 🙄 I like a medium roast, Columbia single origin.
It's dropped -33% already, but I can clearly see the market structure entering bearish phase after the bullish phase, peak (the new high) and now likely a multi-month bearish season. The question is just where the price can bottom for such a well loved commodity.
I looked at past cycles, not too long ago we dropped roughly 44% during the bearish cycle, taking 2-3 years to move into accumulation before another impulse wave up. That places a target for entry exactly in the highlighted zone around $250ish.
But I wouldn't get too greedy on my favorite commodity, buying orders can't be too low either. This would likely have to be a multiyear hold. Pepperstone sells coffee on cash contract but I usually do futures. Pity that I didn't get in sooner, bullish cycles is also at least a 2 year journey. I'll sell when the weather is bad 😅
Next up? Chocolate for sure...
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.