Market Curiosity: Exploring Markets And Systems

May 8, 2011

Looking to short July coffee (5th update, May 26) +99%

Filed under: +76 to +100%, Futures Trades — Tags: , — Jeff Fitzmyers @ 6:46 pm

+ Could bounce from a test of yellow 34 EMA.
– Pretty big volume the past 3 days and not so much the 6 days before that.
– Monthly and weekly CCI trending down.
– RSI daily divergence.
– Weekly RSI > 70 since last December. Suggests a pull back to magenta 170 EMA.
+ Price has not broken rising trendline for this move.

10 year cycle.

20 year cycle.

30 year cycle.

Commercials have been nicely short for a while.

This would be about a 2 week swing trade. Thinking price could move up a bit for 1-4 days. Will be watching intra day and try to short via futures and puts.

Opps, wanted to show the monthly chart. As Martin Armstrong just pointed out, “Anytime a market doubles like this [silver] in the last few months going into a high, it is the kiss of death.”

May 10: Short on May 9th at 2.878. Stop loss 2.954 ish.

May 11: Stop loss lowered to: 2.8715 ish.
– Price just blew through the lower Bollinger band with volume.
± AB=CD on the 60 min targets about 2.7.

May 14: Looking at the monthly chart indicates that the major tops were followed by 4-6 months of weakness with at least 50% of the rise retraced. I am tempted to start adding shorts, but since I’m being much more conservative due to last month’s poor trading, I won’t unless the opportunity has a good risk reward ratio. (I managed to lose money shorting crude’s huge 2008 drop by getting too cute.) Current target is around 2.45. Will lower stop loss to around 2.80 Sunday night.

May 26: Covered +99%. In addition to comments on the chart:
+ RSI started turing up.
+ Volume in down days trending down the past few weeks.
+ Although I was looking for a test of the medium EMA (magenta line), the weekly CCI possibly bottoming suggests time is running out for a decline and price could easily test the yellow EMA.
+ The fed/gov’s will apparently keep printing. Respect that effect on nominal prices.

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