Thursday, November 16, 2006

Oh No! Please don't say coffee is going up!

Could we be looking at yet another big commodity bull in coffee?

London Robusta coffee has been in a solid uptrend since August that was not replicated in the New York Arabica contract... until late last month.

A big bullish bar off the double bottom punched through the downsloping resistance, launching quite a strong move upwards.

I was expecting a bit more retracement as a spot to possibly to some pyramiding, but yesterdays move off the trendline looks incredibly bullish. I just don't know whether its a good spot to add. But a strong bull doesn't hang about to offer traders a nice comfortable entry... case in point; corn.

If this takes off, so will volatility, so optioneers might want to get long some vega.

I am however, bracing myself for a price rise at my wife's favourite coffee shop. It might just cost me all my profits from trading this contract. :-o

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