SWING TRADING: The Coffee Is Hot!
By Noel Campbell, Optionetics.com
Published: March 30, 2007 2:45 PM EST
I have a very exciting and highly potential profitable set-up to share with you on Coffee futures (KC-SpotV) traded out of New York.
Mario La Marra and I have been writing about the potential for massive upside on Coffee now for a while. The market has not yet experienced the boom we are anticipating, but I say now is the time and it’s ready to go on the boil.
The reason we are expecting a boom in the price of Coffee is based on 30-year and 10-year cycles culminating in 2007. Chart 1 shows you Coffee prices in 1977 and 1997, when the price of coffee exceeded 300 cents per pound. Coffee moves in increments (ticks) of 0.05 cents per pound, which are worth US$18.75 per contract. With coffee at around 117 cents per pound right now, a rise of 183 cents would bring us to a rally of 300 cents per pound.183 cents is 3660 ticks or US$68,625 per contract! Of course this is working on maximum optimism, but have I got your attention now?
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posted by Robert @ 4/01/2007
2 Comments
2 Comments:
KC coffee is trading contracts on the New York Board of Trade.
KC coffee is trading May contracts on 4/9/2007 at 111.60. The previous high was 133.00 on 12/15/2006. The high before that was 126.95 on 4/20/2006. The previous high was 135.60 on 1/27/2006. And before that it was 145.45 on 6/7/2005.
KC coffee is trading July contracts on 4/9/2007 at 114.45. The previous high was 135.80 on 12/15/2006. The high before that was 127.85 on 4/21/2006. The previous high was 136.20 on 1/27/2006. And before that it was 130.15 on 8/12/2005.
KC coffee is trading September contracts on 4/9/2007 at 116.75. The previous high was 138.00 on 12/15/2006. The high before that was 130.00 on 4/20/2006. The previous high was 136.70 on 1/27/2006. And before that it was 128.60 on 8/11/2005.
Coffee is harvested in May through August, and November through February. contracts are normally traded for a maximum of 90 days. May contracts are traded through March, April, and expire in May, for example. Sometimes they trade monthly, bi-monthly or quarterly. KC is traded bi-monthly.
There is no indication that KC coffee will make a major move within the next month. As all commodities, however, this may change suddenly.
KC doesn't seem to be ready to make a move, and I went back and checked Robusto coffee (CF) and Mini-coffee (MK) contracts. Mini-coffee seems to run similar to KC, but Robusto seems ready to move upward one more time before making a downward move.
While it is true that 10-year, 20-year, and 30-year charts will establish what time of year a trend will occur, it is obvious to a chart watcher that this is unnecessary here. The moves indicated parallel harvest times. The only question is when the move will occur. In my view, KC and MK are not viable moves at this time. Wait to see what the October and December contracts will do just before the August harvest goes to market.
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