I was as giddy as a little school girl today as December Coffee futures tagged a long term key level area of 101 and buyers came in fast and furious. 

Coffee had already tested and pulled above. Today was another test resulting in a reversal daily hammer candle. If we run the Fibonacci levels from the high of 192 two years ago, the first major level (23%) lines up perfectly with what is visual horizontal resistance at $121.30. The daily MACD is drifting up and the RSI is coming off of extreme oversold levels. 

Trade Idea:

Long December Coffee 

Target Profit $121.29

Stop Loss $101

Move SL to Break Even once price reaches $106.6

Adding to the technical setup, turmoil in South America is ramping up even further. Argentina’s currency crisis deepened on Thursday as an emergency interest-rate increase to 60 percent failed to stop jittery investors from pulling their money out of the country. Brazil has now deployed armed forces to its borders in an effort to keep refugees from flowing into the country as a result of inflationary economic conditions. 

The region runs the risk of increased strain and adds to risk of future crop production supply adding to the bullish case for coffee. This and the very clear technical setup has Wags doing a little dance in excitement. 

Happy trading. 

-Wags. 

 

Like all metals the last few months, Silver has also felt pain. Weekly RSI is in oversold territory but did end with a a reversal doji. The daily also had a bullish engulfing Friday. Further consolidation up is likely to the 15.3 level especially if the dollar continues weakening. 

Copper and anything else paired to the Dollar felt more pain today as the USD spiked to its highest level in over 15 months. But I believe the dollar bull market and Metal’s bear market are both in their ninth inning. 

Looking at the daily of Copper we had yet a lower close but looking back over the past two months, there are signs of hope for Copper bulls. Each recent major lower lower is met with a higher RSI. Bullish RSI divergence. Stochastics are oversold and although the MACD is still negative the peak to trough is much lower that the first higher low. 

Conversely, the $DXY which charts the Greenback has a very clear higher high today but the RSI is not confirming. 

What’s the game plan? Long for a swing trade up the the 38% Fib Retracement coming in at 2.9187. That is unless the rough looking double bottom (including a daily wick) holds. 

Copper is one of the base metals the modern world cannot do without. That’s me not going into all the personal electronics and electric cars combined with a supply glut looming. So why not like the red metal down here with a decent trade setup. 

Turkey and its troubles threw a little Risk Off in the market Friday but the downside was contained. The S&P Futures tagged the 21day MA and reversed course to end the week only sightly down. 

 

 

 

 

 

 

 

 

Inflation has been creeping up but still not enough to ring any alarm bells. Longer term view still remains bullish and a test of January all time highs are in the cards and not far away.  

WTI Crude broke the wedge mentioned last week to the downside and is now below the 8&21 MAs. Friday saw some consolidation to the upside but so long as contained by those MAs the bias is to the downside. The next major support lies at the 200day which is lining up with a horizontal level at 64.50.  

Copper was close to breaking out when pushed through key levels and moving averages but gradually pulled back as the Risk Off sentiment took over the market. The 2.70 level has provided support so the question will be if it does this time. The daily MACD has been creeping up but until a positive close the bias remains sell the rips with long attempts around the 2.7 area. 

And the big winning trade of the week was Wheat. Along with other Ag commodities having extreme moves over the past months due to Tariffs, Wheat has been a beast. Until this week. Wheat was pressing channel resistance when we alerted a Trade Alert to sell. It took the week for the trade to pay out but it did nicely Friday with wheat down 3.2% on the day. With a MACD slowing and clear bearish RSI divergence, sell the rips is the course of action next week until the 21day MA is tagged and then reassess. It could pause and consolidate a little there but until proven otherwise, a test of channel support wouldn’t be a bad thing. 

 

Nearing the later months of Summer, can’t believe I have to say that, big earnings out of the way and the Fed holding rates, I believe we’re in for a grind higher. Unless we take out January the possibility to stay range bound with support of 2800 is pretty good. 

The VIX is giving clues to this as has been forming a falling triangle (they break to the downside more than to the upside) ever since the big spike in Feb. 

On to Crude, bias still remains to the downside towards 64.50 area unless it can get above the 69.60 level.

Its early but Copper is starting to show signs of a stronger bottom. MACD is close to ticking positive. Just keep on eye on daily closings above the 8&21days for confirmation.