Coffee (continuation chart)

A market to keep a real close eye on is Coffee.  This market has been selling off hard since the May 2011 highs.  However, according to the COT report the commercials are at record long levels and markets usually bottom when the smart money is at bullish extremes.  The hard part is the timing, which could be days or weeks away.  First, some interesting details supporting possible lows.  The monthly continuation chart shows an upward sloping trendline that has served as support numerous times since the Dec 2001 low.  Prices are getting near this area again.  Also, the RSI is oversold and hasn't been at this level since the 2001 bottom.  Could this be the area this market bounces from?  The weekly continuation chart currently shows a potential double bottom forming with bullish divergence on the RSI.  Finally, seasonally this market tends to bounce early Dec and rally into a May top with dips in Jan and Mar.  It could be too tough to time this market with futures so options might be a better play.  Options aren't my specialty, but I'm currently experimenting with them for COT based trade set-ups like this one.  I've put on a Mar bullish call spread (150-162.50 strikes) and will be looking for other possible trades in both options and futures in the next couple weeks.  I will show analyze the chart on the Mar futures contract this week.